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our solutions integrate operations management with analytics and business transformation to deliver actionable business insights and long-term business impact . we help shape our clients ' operating environments through process and technology interventions and analytics driven insights into business performance with the goal of increasing quality and productivity while improving risk management and control . we changed our reporting segments nomenclature in 2014 to operations management ( previously called outsourcing services ) and analytics and business transformation ( previously called transformation services ) in order to more accurately reflect the changing nature of our engagements with our clients . for comparability with our prior periods , the business composition of each segment remains unchanged . our global delivery network spreads across the united states , europe and asia . we operate nineteen operations centers in india , six operations centers in the u.s. , five operations centers in the philippines and one operations center in each of bulgaria , romania and the czech republic . in addition to these operations centers , we acquired multiple regional offices in the u.s. as part of our acquisitions of blue slate solutions , llc ( blue slate ) and overland holdings , inc. ( overland ) during the year ended december 31 , 2014. on july 1 , 2014 , we acquired blue slate . prior to its acquisition , blue slate was a business process management ( bpm ) and technology solutions company that specializes in transforming operations through business process automation , use of innovative technologies , data integration and analytics . blue slate helps clients achieve large productivity improvements , develop an agile and cost-effective operating model , enhance customer satisfaction and deliver measurable return on their investments . on october 24 , 2014 , we acquired overland . prior to its acquisition , overland specialized in providing premium audit services , commercial and residential underwriting surveys and loss control services to more than 300 property and casualty ( p & c ) insurers using a bpaas model . overland offers services including physical audit , telephone audit , and government inspection and has developed an automated premium audit solution auditstream ® . overland also offers survey products and services to homeowners and commercial insurance carriers through castle high value surveys ® . revenues on november 1 , 2013 , we received a notice of termination from the travelers indemnity company ( travelers ) under the professional services agreement , dated as of march 7 , 2006 , between us and travelers ( as amended from time to time , the services agreement ) . revenues from travelers were $ 8.2 million and $ 46.2 million during the year ended december 31 , 2014 and 2013 , respectively . the reduction in revenues from travelers during 2014 was due to $ 12.0 million related to certain services we used to provide to travelers being transitioned away from us and we reimbursed travelers for certain of their expenses incurred in connection with the termination ( the disentanglement costs ) of $ 26.3 million compared to $ 0.3 million in 2013. for the year ended december 31 , 2014 , we had total revenues of $ 499.3 million ( net of $ 26.3 million of reimbursement of disentanglement costs to travelers ) compared to total revenues of $ 478.5 million ( net of $ 0.3 million of reimbursement of disentanglement costs to travelers ) for the year ended december 31 , 2013 , an increase of $ 20.8 million or 4.4 % . revenues from operations management services were $ 388.7 million ( net of 45 $ 26.3 million of reimbursement of disentanglement costs to travelers ) for the year ended december 31 , 2014 compared to $ 395.0 million ( net of $ 0.3 million of reimbursement of disentanglement costs to travelers ) for the year ended december 31 , 2013. revenues from analytics and business transformation services were $ 110.6 million for the year ended december 31 , 2014 compared to $ 83.5 million for the year ended december 31 , 2013. we serve clients mainly in the u.s. and the u.k. , with these two regions generating approximately 73.9 % and 20.4 % , respectively , of our total revenues for the year ended december 31 , 2014 and approximately 73.8 % and 19.4 % , respectively , of our total revenues for the year ended december 31 , 2013. in the years ended december 31 , 2014 and 2013 , our total revenues from our top ten clients accounted for 50.3 % and 57.9 % of our total revenues , respectively . none of the clients accounted for more than 10 % of our total revenues in the year ended december 31 , 2014 and 2013. while we have reduced our revenue concentration with our top clients and are developing relationships with new clients to diversify our client base , we believe that the loss of any of our ten largest clients could have a material adverse effect on our financial performance . we derived revenues from 26 and 22 new clients for our services in the years ended december 31 , 2014 and 2013 , respectively . another two clients acquired during the year did not generate revenues in 2014 but are expected to start generating revenues from 2015. our business our business is divided into two reporting segments : operations management ( previously called outsourcing services ) and analytics and business transformation ( previously called transformation services ) . overland 's results are included in our operations management segment and blue slate 's results are included in our analytics and business transformation segment . we market our services to our existing and prospective clients through our sales and client management teams , which are aligned by key industry vertical and cross-industry domains such as finance and accounting . our sales and client management teams operate from the u.s. and europe . story_separator_special_tag we recognize deferred tax assets and liabilities for temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards . we determine if a valuation allowance is required or not on the basis of an assessment of whether it is more likely than not that a deferred tax asset will be realized . critical accounting policies and estimates the discussion and analysis of our financial condition and results of operations are based upon the financial statements included in this annual report on form 10-k , which have been prepared in accordance with generally accepted accounting principles in the u.s ( us gaap ) . the notes to our consolidated financial statements contain a summary of our significant accounting policies . we consider the policies discussed below to be critical to an understanding of our consolidated financial statements , as their application places the most significant demands on management 's judgment regarding matters that are inherently uncertain . these policies include revenue recognition , estimating tax liabilities , stock-based compensation , goodwill , intangibles and long-lived assets , derivative instruments and assets and obligations related to employee benefit plans . these accounting policies and the associated risks are set out below . future events may not develop exactly as forecast and estimates routinely require adjustment . revenue recognition we derive our revenues from operations management and analytics and business transformation services . revenues from operations management are recognized primarily on a time-and-material , cost-plus , transaction based and outcome-based pricing ; revenues from analytics and business transformation services are recognized primarily on a time-and-material , fixed price or contingent fee basis . the services provided within our operations management and analytics and business transformation services contracts generally contain one unit of accounting , except the software and related services contracts involving implementation services and post contract maintenance services . in such multiple element arrangements , revenue is allocated to maintenance based the price charged when that element is sold separately ( vendor specific objective evidence or vsoe ) . revenues are recognized under our contracts generally when four basic criteria are met ; persuasive evidence of an arrangement exists , the sales price is fixed or determinable , services have been performed and collection of amounts billed is reasonably assured . 50 revenues under time-and-material , transaction-based and outcome-based contracts are recognized as the services are performed . revenues are recognized on cost-plus contracts on the basis of contractually agreed direct and indirect costs incurred on a client contract plus an agreed-upon profit markup . such revenues are recognized as the related services are provided in accordance with the client contract . when the terms of the client contract specify service level parameters that must be met ( such as turnaround time or accuracy ) , we monitor such service level parameters to determine if any service credits or penalties have been incurred . revenues are recognized net of any service credits that are due to a client . revenues for our fixed-price analytics and business transformation services contracts are recognized using the proportional performance method when the pattern of performance under the contracts can be reasonably determined . we estimate the proportional performance of a contract by comparing the actual number of hours or days worked to the estimated total number of hours or days required to complete each engagement . the use of the proportional performance method requires significant judgment relative to estimating the number of hours or days required to complete the contracted scope of work , including assumptions and estimates relative to the length of time to complete the project and the nature and complexity of the work to be performed . we regularly monitor our estimates for completion of a project and record changes in the period in which a change in an estimate is determined . if a change in an estimate results in a projected loss on a project , such loss is recognized in the period in which it is first identified . our software and related services contracts generally contain software license , related services and maintenance elements . maintenance revenues are generally recognized on a straight-line basis over the contract term as they are separable and have vsoe . services related to software licenses are evaluated to determine whether those services are significant or essential to the functionality of the software . when services are not considered essential , software license revenues and the related services are considered as one unit of accounting and recognized on a proportional performance basis or ratably as the services are performed . when services are significant or considered essential , revenues related to license fee and services are recognized as the services are performed using the percentage of completion method of accounting , under which the total value of revenue is recognized on the basis of the percentage that each contract 's total labor hours to date bears to the total expected labor hours ( input method ) . we accrue revenues for services rendered between the last billing date and the balance sheet date . accordingly , our accounts receivable include amounts for services that we have performed and for which an invoice has not yet been issued to the client . these are included in accounts receivable on our consolidated balance sheet and the amounts are disclosed in the notes to our consolidated financial statements . goodwill , intangible assets and long-lived assets the purchase method of accounting is used for all business combinations . we account for our business combinations by recognizing the identifiable tangible and intangible assets and liabilities assumed , and non-controlling interest in the acquired business , measured at their acquisition date fair values . all assets and liabilities of the acquired business including goodwill are assigned to reporting units . acquisition related costs are expensed as incurred under sg & a expenses . we evaluate goodwill
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources replace_table_token_14_th as of december 31 , 2014 and 2013 , we had $ 188.1 million and $ 154.1 million , respectively in cash , cash equivalents and short-term investments ( including $ 110.5 million and $ 67.2 million , respectively held by our foreign subsidiaries ) . we do not intend to repatriate our overseas funds since our future growth partially depends upon continued infrastructure and technology investments , geographical expansions and acquisitions outside of the u.s. therefore , we intend to reinvest the earnings generated outside of the u.s. if we were to repatriate our overseas funds , we would accrue and pay applicable taxes . operating activities : cash flows provided by operating activities decreased by $ 16.1 million from $ 82.8 million for the year ended december 31 , 2013 to $ 66.7 million for the year ended december 31 , 2014. generally , factors that affect our earningsincluding pricing , volume of services , costs and productivityaffect our cash flows provided by operations in a similar manner . however , while management of working capital , including timing of collections and payments affects operating results only indirectly , the impact on the working capital and cash flows provided by operating activities can be significant .
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the performance within our genetic screening business was driven by continued expansion of prenatal screening platforms , with broad-based growth experienced across all major geographies , particularly in china with continued expansion of our newborn screening business through our acquisition of sym-bio lifescience co. , ltd. ( sym-bio ) in fiscal year 2009. in the research market , demand for our reagents and 32 instrumentation was encouraging in the academic sector . we saw strong demand for our high-end opera ® cellular imaging systems , enspire plate readers and proprietary alpha detection reagents , which are all specifically developed to address the growing needs of the academic sector . we are refocusing resources to meet our pharmaceutical customer 's evolving needs . as these customers shift their spending on downstream technologies in pre-clinical research , we are well positioned with our in-vivo imaging offering , available through our newly acquired visen business . as the rising cost of healthcare continues to be one of the critical issues facing our customers , we anticipate that even with continued pressure on lab budgets and credit availability , the benefits of providing earlier detection of disease , which can result in savings of long-term health care costs as well as creating better outcomes for patients , are increasingly valued and we expect to see continued growth in these markets . in our environmental health segment , our laboratory services business enables our customers to drive efficiencies , increase production time and reduce maintenance costs , all of which continue to be critical for our customers . during fiscal year 2010 , we continued to grow by adding new customers to our onesource ® multivendor service offering , which we expanded in markets beyond our traditional customer base and services . sales of environmental , food and consumer safety and testing products grew in fiscal year 2010 due to the continued global need for robust contaminant identification solutions , particularly for trace metals analysis in water . this trend drove the demand for our inorganic analysis solutions such as our optima 7000 and our recently launched nexion ® mass spectrometer . we also continued to experience strong demand for quality and safety assurance testing equipment in food and pharmaceuticals throughout the global supply chain . in addition , we continued to see signs of recovery in our traditional chemical markets with the reduction of constraints on capital purchases to rebuild capacity as a result of the cyclical recovery and increased demand after an extended period of delayed capital investments . we believe that the need for increased inspection , testing and tracking of contaminants will continue to drive increased demand for our products . our consolidated gross margins decreased approximately 60 basis points in fiscal year 2010 as compared to fiscal year 2009 due to changes in product mix , with growth in sales of lower gross margin product offerings , partially offset by productivity improvements and cost containment initiatives . our consolidated operating margin improved approximately 120 basis points in fiscal year 2010 as compared to fiscal year 2009 , primarily the result of increased sales volume and cost containment initiatives , partially offset by restructuring activities , increased pension expenses , initial costs on key growth initiatives and the early stage dilution from our recent acquisitions , specifically signature genomic and visen . we believe we are well positioned to continue to take advantage of the improved spending trends in our end markets and to promote our efficiencies in markets where current conditions may increase demand for certain services . overall , we believe that our strategic focus on human health and environmental health coupled with our breadth of end markets , deep portfolio of technologies and applications , leading market positions , global scale and financial strength will provide us with a strong foundation for continued growth . consolidated results of continuing operations sales 2010 compared to 2009. sales for fiscal year 2010 were $ 1,704.3 million , as compared to $ 1,550.8 million for fiscal year 2009 , an increase of $ 153.6 million , or 10 % , which includes an approximate 2 % increase in sales attributable to acquisitions and no net impact from changes in foreign exchange rates . the analysis in the remainder of this paragraph compares segment sales for fiscal year 2010 as compared to fiscal year 2009 and includes the effect of foreign exchange rate fluctuations and acquisitions . the total increase in sales reflects a $ 64.7 million , or 9 % , increase in our human health segment sales , due to an increase in diagnostics market sales of $ 54.5 million and an increase in research market sales of $ 10.2 million . our environmental health segment sales increased $ 88.9 million , or 11 % , due to increases in environmental and safety and industrial markets sales of $ 47.5 million , and an increase in laboratory services market sales of $ 41.4 million . 33 2009 compared to 2008. sales for fiscal year 2009 were $ 1,550.8 million , as compared to $ 1,659.7 million for fiscal year 2008 , a decrease of $ 108.9 million , or 7 % , which includes an approximate 3 % decrease in sales attributable to unfavorable changes in foreign exchange rates and an approximate 1 % increase from acquisitions . the analysis in the remainder of this paragraph compares segment sales for fiscal year 2009 as compared to fiscal year 2008 and includes the effect of foreign exchange rate fluctuations and acquisitions . the total decrease in sales reflects a $ 37.0 million , or 5 % , decrease in our human health segment sales , due to a decrease in diagnostics market sales of $ 22.8 million and a decrease in research market sales of $ 14.2 million . story_separator_special_tag we recorded a charge of $ 2.7 million in fiscal year 2007 related to payments for this lease obligation . the buyer filed for bankruptcy protection during the third quarter of fiscal year 2008 and was delinquent in making both its lease payments and payments for certain building expenses . the buyer ceased operations in the third quarter of fiscal year 2009 and vacated the property . we recorded an additional charge of $ 0.9 million during the third quarter of fiscal year 2009 related to waste removal and restoration costs , and reduced the estimated sublease rental payments reasonably expected to be obtained for the property . we also recorded an additional charge of $ 0.1 million during the second quarter of fiscal year 2010 to further reduce the estimated sublease rental payments reasonably expected to be obtained for the property . we were required to make payments for these obligations of $ 1.7 million during fiscal year 2010 , $ 1.1 million during fiscal year 2009 , and $ 0.4 million during fiscal year 2008. the remaining balance of this accrual as of january 2 , 2011 was $ 0.5 million . interest and other ( income ) expense , net interest and other ( income ) expense , net , consisted of the following : replace_table_token_16_th 2010 compared to 2009. interest and other ( income ) expense , net for fiscal year 2010 was income of $ 8.4 million , as compared to an expense of $ 15.8 million for fiscal year 2009 , an increase of $ 24.2 million . the increase in interest and other ( income ) expense , net , in fiscal year 2010 as compared to fiscal year 2009 was primarily due to the pre-tax gain of $ 25.6 million related to the required re-measurement to fair value of our previously held equity interest in the icpms joint venture . interest expense decreased by $ 0.1 million and interest income decreased by $ 0.2 million in fiscal year 2010 as compared to fiscal year 2009 , primarily due to lower interest rates . other expenses for fiscal year 2010 as compared to fiscal year 2009 increased by $ 1.3 million , which consisted primarily of expenses related to foreign currency transactions and foreign currency translation . a more complete discussion of our liquidity is set forth below under the heading liquidity and capital resources. 2009 compared to 2008. interest and other ( income ) expense , net for fiscal year 2009 was an expense of $ 15.8 million , as compared to an expense of $ 44.0 million for fiscal year 2008 , a decrease of $ 28.3 million . the decrease in interest and other ( income ) expense , net , in fiscal year 2009 as compared to fiscal year 2008 was primarily due to the discontinuance and settlement of forward interest rate contracts with a $ 17.5 million loss that 39 was recognized into interest expense during fiscal year 2008 , as well as lower interest rates on outstanding debt balances , partially offset by the increase in the mix of our fixed rate versus variable rate debt . interest income decreased $ 3.0 million as a result of lower interest rates on lower cash balances . other expenses for fiscal year 2009 as compared to fiscal year 2008 decreased by $ 7.3 million , and consisted primarily of expenses related to foreign currency transactions and foreign currency translation . provision for income taxes 2010 compared to 2009. the fiscal year 2010 provision for income taxes on continuing operations was $ 26.1 million , as compared to a provision of $ 31.8 million for fiscal year 2009. the effective tax rate on continuing operations was 16.1 % for fiscal year 2010 as compared to 30.0 % for fiscal year 2009. the lower effective tax rate in fiscal year 2010 was primarily due to ( i ) the favorable impact related to the gain on the previously held equity interest in the icpms joint venture , and ( ii ) the favorable settlement of several income tax audits worldwide during fiscal year 2010. see note 6 to our consolidated financial statements included in this annual report on form 10-k for further discussion of these settlements . 2009 compared to 2008. the fiscal year 2009 provision for income taxes on continuing operations was $ 31.8 million , as compared to a provision of $ 12.7 million for fiscal year 2008. the effective tax rate on continuing operations was 30.0 % for fiscal year 2009 as compared to 12.3 % for fiscal year 2008. the higher effective tax rate in fiscal year 2009 was primarily due to an increase in the expected mix of profits from higher tax rate jurisdictions in fiscal year 2009 as compared to fiscal year 2008 and reflects the favorable settlement of several income tax audits worldwide in fiscal year 2008. see note 6 to our consolidated financial statements included in this annual report on form 10-k for further discussion of these settlements . discontinued operations as part of our continuing efforts to focus on higher growth opportunities , we have discontinued certain businesses . we have accounted for these businesses as discontinued operations and , accordingly , have presented the results of operations and related cash flows as discontinued operations for all periods presented . the assets and liabilities of these businesses have been presented separately , and are reflected within the assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of january 2 , 2011 and january 3 , 2010. we recorded the following pre-tax gains and losses , which have been reported as a gain ( loss ) on disposition of discontinued operations during the three fiscal years ended : replace_table_token_17_th in november 2010 , we sold our illumination and detection solutions ( ids ) business , which was included in our environmental health segment , for approximately $ 500.0 million
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows fiscal year 2010 operating activities . net cash provided by continuing operations was $ 167.2 million for fiscal year 2010 , as compared to net cash provided by continuing operations of $ 127.8 million for fiscal year 2009 , an increase of $ 39.4 million . the increase in cash provided by operating activities for fiscal year 2010 was a result of income from continuing operations of $ 135.9 million , depreciation and amortization of $ 89.2 million and restructuring and lease charges , net of $ 19.0 million . these amounts were partially offset by pre-tax gains of $ 28.9 million related to the required re-measurement to fair value of our previously held equity interest in the icpms joint venture and asset dispositions , and a net increase in working capital of $ 32.9 million . contributing to the net increase in working capital for fiscal year 2010 , excluding the effect of foreign exchange rate fluctuations , was an increase in inventory of $ 22.6 million and an increase in accounts receivable of $ 38.1 million , partially offset by an increase in accounts payable of $ 27.8 million . the increase in inventory overall was primarily a result of new products within our environmental health and human health segments to improve responsiveness to customer requirements . the increase in accounts receivable was a result of higher sales volume during the fourth quarter of fiscal year 2010. the increase in accounts payable was primarily a result of the timing of disbursements during the fourth quarter of fiscal year 2010. changes in accrued expenses , other assets and liabilities and other items , net , decreased cash provided by operating activities by $ 15.0 million for fiscal year 2010 , and primarily related to the timing of payments for tax , restructuring , and salary and benefits , and included the voluntarily contribution made during the third quarter of fiscal year 2010 of $ 30.0 million to our defined benefit pension plan in the united states for the 2009 plan year . investing activities .
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in october 2014 , we entered into a second amendment to the amended and restated loan and security agreement which extended the interest only period from october 1 , 2014 to may 1 , 2015 , after which equal monthly payments of principal and interest are due until the loan maturity date of september 30 , 2017. underwritten public offering . in may 2014 , we closed an underwritten public offering of 4,765,000 shares of common stock , at $ 5.25 per share , and in june 2014 , closed the full exercise of the over-allotment option granted to the representative of the underwriters to purchase an additional 714,750 shares of its common stock , with total gross proceeds of $ 28.8 million , before underwriting discounts and commissions and other offering expenses payable by us . agreement with morphotek . in june 2014 , we entered into a collaboration agreement with morphotek , inc. , or morphotek , to generate novel adcs based on a morphotek antibody linked to chemotherapeutic agents using proprietary adc technology . under the terms of the agreement , we received $ 200,000 during 2014 upon the completion and delivery of the agreed upon initial quantity of adc 's and we will receive future research fees , milestone payments and royalties on future net sales . additionally , we have the potential to receive up to $ 50 million upon the successful attainment of key milestones . agreement with lee 's pharmaceutical . i n october 2014 , we entered into a license agreement with china oncology focus limited , an affiliate of lee 's pharmaceutical holdings limited , or lee 's pharma , pursuant to which lee 's pharma licensed our fully human immune-oncology anti-pd-l1 monoclonal antibody sti-a1014 . under the terms of the agreement , lee 's pharma received exclusive rights to develop and commercialize the sti-a1014 for the greater chinese market , including mainland china , hong kong , macau , and taiwan . in turn , we received an up-front payment of $ 1.0 million recorded as deferred revenue at december 31 , 2014 , and will receive potential future milestone payments and royalties on future net sales . in total , we have the potential to receive more than $ 46 million upon the successful attainment of key milestones , excluding royalties , and retain all the rights to use data generated by lee 's pharma for territories outside of the greater chinese market . additionally , lee 's pharma purchased 400,000 shares of our common stock at a price of $ 9.00 per share , or an aggregate of $ 3.6 million , before commissions . joint venture agreement . i n december , 2014 , we entered into an agreement with nantbiocell , llc , or nantbiocell , a wholly owned subsidiary of nantworks , a private company owned by dr. patrick soon-shiong . under the terms of the agreement , we and nantbiocell intend to establish a new joint venture called the immunotherapy antibody jv , or jv , as an independent biotechnology company with $ 20.0 million initial joint funding expected mid-2015 , $ 12.0 million from nantbiocell and $ 8.0 from us representing a at 60:40 ownership between nantbiocell and us , respectively . the jv will focus on accelerating the development of multiple immuno-oncology monoclonal antibodies ( mabs ) for the treatment of cancer , including but not limited to anti-pd-1 , anti-pd-l1 , anti-ctla4 mabs , and other immune-check point antibodies as well as antibody drug conjugates ( adcs ) and bispecific antibodies . in connection with this agreement we entered into a securities purchase agreement with cambridge equities , lp , or cambridge , a limited partnership owned by dr. soon-shiong , pursuant to which we agreed to issue and sell to cambridge a 19.9 % equity stake or an aggregate of 7,188,062 shares of our common stock at a price of $ 5.80 per share for an aggregate purchase price of $ 41.7 million . in connection with the purchase agreement , cambridge received a warrant to purchase 1,724,138 shares of our common stock . the warrant is exercisable for a period of three years from the date of issuance at an initial exercise price of $ 5.80 per share and is subject to customary adjustments provisions for stock splits , stock dividends , recapitalizations and the like . agreement with conkwest incorporated . in december 2014 , we also entered into a collaboration agreement with conkwest incorporated , or conkwest , a privately-held life sciences company developing and commercializing the proprietary cancer-killing cell line neukoplast ( also known as nk-92 ) for the treatment of cancers and viral infections . jointly , we and conkwest will generate and 53 develop products for adoptive immunocellular therapy utilizing neukoplast cells and chimeric antigen receptors , or cars , derived from our g-mab antibody library . the product candidates , coined chimeric antigen receptor tumor-attacking neukoplast ( car.tnk ) , will be developed for the treatment of hematological malignancies as well as solid tumors . under the terms of the agreement , we and conkwest will establish an exclusive global strategic collaboration focused on accelerating the development of car.tnks , including cd19-car.tnk , pd-l1-car.tnk , psma-car.tnk , cd123-car.tnk , and other car.tnks for the treatment of hematological malignancies as well as solid tumors . both companies will jointly own and share development costs and revenues from any developed car.tnk products . in connection with this agreement we entered into a subscription and investment agreement with conkwest , as amended , pursuant to which conkwest issued and sold to us an aggregate of 3,034,473 shares of conkwest class a common stock for an aggregate purchase price of $ 10.0 million representing an equity stake in conkwest of approximately 9 % . related party agreements with wholly-owned subsidiary ark animal health , inc. license and development agreement . story_separator_special_tag cost of revenues relate to sales and services costs totaling $ 4. the costs generally include employee-related expenses including salary and benefits , direct materials and overhead costs including rent , depreciation , utilities , facility maintenance and insurance . research and development expenses . research and development expenses for the years ended december 31 , 2013 and 2012 were $ 9,017 and $ 3,830 , respectively . research and development expenses include the costs to identify , isolate and advance human antibody drug candidates derived from our libraries , costs to initiate and or conduct our bioequivalence , or be , registration trial related to cynviloq and prepare for our new drug application filing anticipated in 2015 , preclinical testing expenses and the expenses associated with fulfilling our development obligations related to the nih grant awards , collectively the nih grants . such expenses consist primarily of salaries and personnel related expenses , stock-based compensation expense , preclinical testing , clinical development expenses , laboratory supplies , consulting costs , depreciation and other expenses . the increase of $ 5,187 is primarily attributable to salaries and compensation related expense , preclinical testing , depreciation , consulting and lab supply costs incurred in connection with our expanded research and development activities , our be registration trial and receipt of the two nih grant awards in july 2011 and june 2012 , respectively . acquired in-process research and development expenses . acquired in-process research and development expenses for the years ended december 31 , 2013 and 2012 were $ 5,986 and $ 0 , respectively . acquired in-process research and development expenses include : ( i ) the costs associated with entering into a termination and release agreement with opko whereby we terminated the opko license in its entirety , ( ii ) the purchase price of tocosol , and ( iii ) the purchase price of the license rights to rtx . general and administrative expenses . general and administrative expenses for the years ended december 31 , 2013 and 2012 were $ 6,317 and $ 1,606 , respectively . general and administrative expenses consist primarily of salaries and personnel related expenses for executive , finance and administrative personnel , stock-based compensation expense , professional fees , infrastructure expenses , legal and accounting expenses and other general corporate expenses . the increase of $ 4,711 is primarily attributable to higher salaries and related compensation expenses , stock-based compensation , legal costs related general corporate and ip matters , consulting and business development expenses and higher compliance costs associated with our public reporting obligations . intangible amortization . intangible amortization for the years ended december 31 , 2013 and 2012 was $ 804 and $ 0 , respectively . the increase resulted primarily from the acquisition and amortization of intangible license rights from igdrasol , from the amortization of our exclusive irrevocable option agreement to acquire igdrasol , and from acquired technology and customer relationships from concortis . interest expense . interest expense for the years ended december 31 , 2013 and 2012 was $ 253 and $ 0 , respectively . the increase in interest expense resulted from borrowings under the equipment loan entered into in february 2013 and from borrowings under the loan and security agreement entered into in september 2013. interest income . interest income for the years ended december 31 , 2013 and 2012 was $ 10 and $ 7 , respectively . the increase in interest income resulted from higher average cash balances in 2013 as compared to 2012. we expect that continued low interest rates will significantly limit our interest income in the near term . net loss . net loss for the years ended december 31 , 2013 and 2012 was $ 21,911 and $ 4,845 , respectively . the increase in net loss is mainly attributable to the expanded research and development , in-process research and development , and general and administrative activities . 57 story_separator_special_tag ratios that may restrict our ability to operate our business . critical accounting policies our consolidated financial statements are prepared in accordance with generally accepted accounting principles . the preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets , liabilities , revenues , expenses and related disclosures . we evaluate our estimates and assumptions on an ongoing basis . our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances . our actual results could differ from these estimates . we believe the following accounting policies and estimates are most critical to aid in understanding and evaluating our reported financial results . cash and cash equivalents . we consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents . we minimize our credit risk associated with cash and cash equivalents by periodically evaluating the credit quality of our primary financial institution . the balance at times may exceed federally insured limits . as of december 31 , 2014 , we have not experienced any losses on such accounts . stock-based compensation . we account for stock-based compensation in accordance with authoritative guidance for stock-based compensation , which requires us to measure the cost of employee services received in exchange for equity incentive awards , including stock options , based on the grant date fair value of the award . the fair value is estimated using the black-scholes option pricing model . the resulting cost is recognized over the period during which the employee is required to provide services in exchange for the award , which is usually the vesting period . we recognize compensation expense over the vesting period using the straight-line method and classify these amounts in the consolidated statements of operations based on the department to which the related employee reports . to the extent that we issue future stock incentive awards to employees , our stock-based
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources as of december 31 , 2014 , we had $ 71,902 in cash and cash equivalents primarily attributable to : ( i ) issuance of 7.2 million shares of our common stock for cash to cambridge equities in a private equity financing totaling $ 41,723 , ( ii ) issuance of 400,000 shares of our common stock for cash to lee 's pharmaceuticals in a private equity financing totaling $ 3,420 , ( iii ) the closing of our underwritten public offerings in october 2013 and may 2014 and conversion of outstanding promissory notes into our common stock for aggregate net proceeds of $ 59,847 , and ( iv ) net borrowings under our $ 12.5 million amended and restated loan and security agreement in march 2014. our working capital as of december 31 , 2014 was $ 64.4 million . cash flows from operating activities . net cash used for operating activities was $ 28,764 for 2014 and is primarily attributable to our net loss of $ 34,657 and our net reduction in working capital balances of $ 222 , which were offset by $ 6,115 in non-cash activities relating to stock-based compensation , acquired in-process research and development , depreciation and amortization expense and other non-cash activities . net cash used for operating activities was $ 16,489 for 2013 and primarily reflects a net loss of $ 21,911 , which was partially offset by $ 4,984 in non-cash activities relating primarily to stock-based compensation and depreciation expense . we expect to continue to incur substantial and increasing losses and have negative net cash flows from operating activities as we seek to expand and support our clinical and preclinical development and research activities . cash flows from investing activities . net cash used for investing activities was $ 10,591 for 2014 as compared to $ 503 for 2013. the net cash used related primarily to an investment in conkwest incorporated class a common stock and equipment acquired for research and development activities . we expect to increase our investment in equipment as we seek to expand and progress our research and development capabilities . cash flows from financing activities .
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as described in part i , item 3 , legal proceedings , of this annual report , we have initiated lawsuits to enforce our patent rights against certain generic pharmaceutical companies . critical accounting policies the preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements , as well as the reported revenues and expenses during the reported periods . we base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances , the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources . actual results may differ from these estimates under different assumptions or conditions . a summary of our significant accounting policies appears in the notes to our audited consolidated financial statements for the year ended december 31 , 2019 included in this annual report . however , we believe that the following accounting policies are important to understanding and evaluating our reported financial results , and we have accordingly included them in this discussion . leases . in accordance with accounting standards codification ( asc ) 842 , leases , effective january 1 , 2019 , we determine if an arrangement contains a lease at inception . right-of-use ( rou ) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from that lease . for leases with a term greater than 12 months , rou assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term . the lease term includes the option to extend the lease when it is reasonably certain we will exercise that option . we do not combine lease and non-lease elements for office leases . for existing leases as of january 1 , 2019 , executory costs are excluded from lease expense , which is consistent with our accounting under asc 840 , leases . for all leases entered into after january 1 , 2019 , executory costs are allocated between lease and non-lease elements based upon their relative stand-alone prices . when available , we use the rate implicit in the lease to discount lease payments to present value ; however , most of our leases do not provide a readily determinable implicit rate . therefore , we use our incremental borrowing rate based on information available at the lease commencement date in determining the present value of lease payments . our incremental borrowing rate is derived from information available at the lease commencement date in determining the present value of lease payments . since we do not have outstanding debt that could provide an indication of the appropriate discount rate we used publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates . in making this estimation we considered market comparable data on companies with similar credit rating , secured contracts and contract length terms . we use the lease term to determine the incremental borrowing rate . net product sales . our net product sales consist of sales of hetlioz ® and sales of fanapt ® . in accordance with asc subtopic 606 revenue from contracts with customers ( asc 606 ) , which we adopted january 1 , 2018 , we account for a contract when it has approval and commitment from both parties , the rights of the parties are identified , payment terms are identified , the contract has commercial substance and collectability of consideration is probable . we recognize revenue when control of the product is transferred to the customer in an amount that reflects the consideration we expect to be entitled to in exchange for those product sales , which is typically once the product physically arrives at the customer . sales taxes , value add taxes , and usage-based taxes are excluded from revenues . hetlioz ® is available in the u.s. for distribution through a limited number of specialty pharmacies , and is not available in retail pharmacies . fanapt ® is available in the u.s. for distribution through a limited number of wholesalers and is 57 available in retail pharmacies . we invoice and record revenue when customers , specialty pharmacies and wholesalers , receive product from the third-party logistics warehouse which is the point at which control is transferred to the customer . revenues and accounts receivable are concentrated with these customers . outside the u.s. , we commercially launched hetlioz ® in germany in august 2016. we have also entered into a distribution agreement with megapharm ltd. for the commercialization of fanapt ® in israel . the company evaluates outstanding receivables to assess collectability . in performing this evaluation , the company analyzes economic conditions , the aging of receivables and customer specific risks . the transaction price is determined based upon the consideration to which we will be entitled in exchange for transferring product to the customer . our product sales are recorded net of applicable product revenue allowances for which reserves are established and include discounts , rebates , chargebacks , service fees , co-pay assistance and product returns that are applicable for various government and commercial payors . we estimate the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method and update our estimate at each reporting date . variable consideration is included in the transaction price if , in our judgment , it is probable that a significant future reversal of cumulative revenue under the contract will not occur . story_separator_special_tag the income tax benefit for 2019 was primarily due to the reduction of the tax valuation allowance against substantially all of its deferred tax assets in the u.s. tax expense associated with u.s. income before income taxes for the years ended december 31 , 2019 and 2018 was offset by a corresponding tax benefit for the reduction of the valuation allowance recorded against tax attributes that were utilized in those periods . income tax expense was recorded related to certain u.s. state and foreign jurisdictions for the years ended december 31 , 2019 and 2018. liquidity and capital resources as of december 31 , 2019 , our total cash and cash equivalents and marketable securities were $ 312.1 million compared to $ 257.4 million at december 31 , 2018 . our cash and cash equivalents are deposits in operating accounts and highly liquid investments with an original maturity of 90 days or less at date of purchase and consist of investments in money market funds with commercial banks and financial institutions , and commercial paper of high-quality corporate issuers . our marketable securities consist of investments in government sponsored and corporate enterprises and commercial paper . our liquidity resources as of december 31 , 2019 and 2018 are summarized as follows : replace_table_token_6_th as of december 31 , 2019 , we maintained all of our cash in two financial institutions . deposits held with these institutions may exceed the amount of insurance provided on such deposits , but we do not anticipate any losses with respect to such deposits . we expect to incur substantial costs and expenses throughout 2020 and beyond in connection with our continued clinical development of tradipitant and our other products , u.s. commercial activities for hetlioz ® and fanapt ® , the european commercial launch activities for hetlioz ® and payments due upon achievement of milestones under our license agreements . additionally , we continue to pursue market approval of hetlioz ® and fanapt ® in other regions . the actual costs to advance tradipitant and our research and development projects and commercial activities for hetlioz ® and fanapt ® are difficult to estimate and may vary significantly . we believe that our existing funds will be sufficient to meet our operating plans for at least the next twelve months . our future capital requirements and the adequacy of our available funds will depend on many factors , primarily including our ability to generate revenue , the scope and costs of our commercial , manufacturing and process development activities , the magnitude of our discovery , preclinical and clinical development programs , and potential costs to acquire or license the rights to additional products . we may need or desire to obtain additional capital to finance our operations through debt , equity or alternative financing arrangements . we may also seek capital through collaborations or partnerships with other companies . the issuance of debt could require us to grant liens on certain of our assets that may limit our flexibility and debt securities may be convertible 62 into common stock . if we raise additional capital by issuing equity securities , the terms and prices for these financings may be much more favorable to the new investors than the terms obtained by our existing stockholders . these financings also may significantly dilute the ownership of our existing stockholders . if we are unable to obtain additional financing , we may be required to reduce the scope of our future activities which could harm our business , financial condition and operating results . there can be no assurance that any additional financing required in the future will be available on acceptable terms , if at all . story_separator_special_tag table does not include various other long-term agreements entered into for services with other third party vendors , such as inventory purchase commitments , due to the cancelable nature of the services or variable terms within the agreement . additionally , this table does not include rebates , chargebacks or discounts recorded as liabilities at the time that product sales are recognized as revenue . ( 3 ) this table does not include potential future milestone obligations under our license agreements for which we have not deemed it probable that the milestone event will occur as of december 31 , 2019 . see part i , item 1 , business , of this annual report , for a description of our licensing arrangements and remaining milestone obligations . ( 4 ) this table does not include liabilities related to uncertain tax positions taken as of december 31 , 2019 . due to the uncertainties in the timing of potential tax audits , the timing associated with the resolution of these positions is also uncertain . item 7a . qualitative and quantitative disclosures about market risk interest rate risks our exposure to market risk is currently confined to our cash and cash equivalents , marketable securities and restricted cash . we currently do not hedge interest rate exposure . we have not used derivative financial instruments for speculation or trading purposes . because of the short-term maturities of our cash and cash equivalents and marketable securities , we do not believe that an increase in market rates would have any significant impact on the realized value of our investments . concentrations of credit risk we deposit our cash with financial institutions that we consider to be of high credit quality and purchase marketable securities which are generally investment grade , liquid , short-term fixed income securities and money-market instruments denominated in u.s. dollars . our marketable securities consist of commercial paper , corporate notes , asset-backed securities and u.s. government agency notes . revenues and accounts receivable are concentrated with specialty pharmacies and wholesalers . there were 5 major customers that each accounted for more than 10 % of total revenues and , as a group , represented 96 % of total revenues for the year ended december 31
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flow the following table summarizes our net cash flows from operating , investing and financing activities for the years ended december 31 , 2019 and 2018 : replace_table_token_7_th operating activities . cash flows provided by operating activities during the year ended december 31 , 2019 were $ 45.9 million , an increase of $ 16.0 million compared to $ 30.0 million during the year ended december 31 , 2018 . the increase reflects an increase of $ 90.3 million in net income and $ 10.9 million from the net change in operating assets and liabilities , partially offset by a decrease of $ 85.3 million in non-cash charges primarily due to the reduction of our tax valuation allowance against substantially all of our deferred tax assets in the u.s. the increase of $ 10.9 million from the net change in operating assets and liabilities primarily relates to a decrease in accounts receivable attributable to the timing of shipments and payments and an increase in accounts payable and other liabilities attributable to the timing of activities and payments . investing activities . cash flows used in investing activities during the year ended december 31 , 2019 were $ 68.3 million , a decrease of $ 41.4 million compared to $ 109.7 million during the year ended december 31 , 2018 .
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pursuant to the purdue collaboration , purdue is conducting a phase 1b clinical trial in psoriasis patients in germany to evaluate the effect of higher concentrations of ast-005 gel on tnf mrna and downstream mrna expression . patient dosing is complete and no serious adverse events have been reported . we expect to have the topline results of the clinical trial in early 2018. our second therapeutic candidate , xcur17 , is an sna targeted to il-17ra for the treatment of mild to moderate psoriasis . we filed a cta for a phase 1 clinical trial of xcur17 in patients with psoriasis in germany in 88 the third quarter of 2017. our cta was approved in february 2018 and we expect the first patient in our phase 1 clinical trial to be dosed in early 2018. we expect this clinical trial to be completed in mid-2018 . our third therapeutic candidate , ast-008 , is an sna consisting of toll-like receptor 9 , or tlr9 , agonists designed for immuno-oncology applications . ast-008 has exhibited anti-tumor activity as both a monotherapy and in combination with certain checkpoint inhibitors across a range of preclinical models of solid and hematological cancers . in the third quarter of 2017 , we received an authorization from the mhra to conduct a phase 1 clinical trial with ast-008 . we began subject dosing in our phase 1 clinical trial for ast-008 in the fourth quarter of 2017. we expect this trial to be completed in mid-2018 . we ultimately plan to clinically advance ast-008 in combination with checkpoint inhibitors . since our inception in 2011 , we have devoted substantial resources to the research and development of snas and the protection and enhancement of our intellectual property . we have no products approved for sale and all of our $ 15.4 million in revenue through december 31 , 2017 has been earned through our research collaboration , license , and option agreement with purdue or as a primary contractor or as a subcontractor on government grants . in addition to our revenue , through december 31 , 2017 , we have funded our operations through private placements of preferred stock with gross proceeds totaling $ 42.8 million , sales of common stock in the private placement with gross proceeds totaling $ 31.5 million and debt financing totaling $ 6.0 million . as of december 31 , 2017 , our cash and cash equivalents were $ 25.8 million . since our inception , we have incurred significant operating losses . our net loss was $ 12.0 million and $ 16.9 million for the years ended december 31 , 2017 and 2016 , respectively . as of december 31 , 2017 , our accumulated deficit was $ 53.5 million . substantially all of our operating losses resulted from expenses incurred in connection with our research programs and from general and administrative costs associated with our operations . we expect to continue to incur significant and increasing losses in the foreseeable future . our net losses may fluctuate significantly from quarter to quarter and year to year . we anticipate that our expenses will increase substantially as we : conduct further preclinical studies and clinical trials of ast-008 and xcur17 ; increase research and development for the discovery and development of additional therapeutic candidates ; advance other therapeutic candidates into preclinical and clinical development ; increase our research and development to enhance our technology ; procure clinical trial materials ; seek regulatory approval for our therapeutic candidates that successfully complete clinical trials ; maintain , expand and protect our intellectual property portfolio ; add operational , financial and management information systems and personnel , including personnel to support our product development and planned future commercialization efforts ; and operate as a public company . we have not generated any commercial product revenue nor do we expect to generate substantial revenue from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our therapeutic candidates . successful therapeutic development and regulatory approval are subject to significant uncertainty and we expect will take at least five years . if we obtain regulatory approval for any of our therapeutic candidates , we expect to incur significant commercialization expenses related to product sales , marketing , manufacturing and distribution . other sources of revenue could include a combination of research and development 89 payments , license fees and other upfront payments , milestone payments , and royalties in connection with our current and any future collaborations and licenses . until such time , if ever , that we generate revenue from whatever source , we expect to finance our cash needs through a combination of public or private equity offerings , debt financings and research collaboration and license agreements . we may be unable to raise capital or enter into such other arrangements when needed or on favorable terms . our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our therapeutic candidates . basis of presentation the audited financial statements of exicure , inc. for the fiscal years ended december 31 , 2017 and 2016 , contained herein , include a summary of our significant accounting policies and should be read in conjunction with the discussion below . recent developments reverse merger on september 26 , 2017 , pursuant to the merger agreement , max-1 acquisition sub , inc. , a wholly-owned subsidiary of max-1 acquisition corporation , or max-1 , merged with and into exicure operating company ( f/k/a exicure , inc. ) , a privately-held delaware corporation referred to herein as exicure opco , with exicure opco remaining as the surviving entity and a wholly-owned operating subsidiary of max-1 , or the merger . story_separator_special_tag the expected volatility is based on calculated enterprise value volatilities for publicly traded companies in the same industry and general stage of development . the estimated forfeiture rates were based on historical experience for similar classes of employees . the dividend yield was based on expected dividends at the time of grant . common stock warrant liability freestanding warrants related to shares that are redeemable , contingently redeemable , or for purchases of common stock that are not indexed to the company 's own stock are classified as a liability on the company 's balance sheet . the common stock warrants are recorded at fair value , estimated using the black-scholes option-pricing model , and marked to market at each balance sheet date with changes in the fair value of the liability recorded in other income ( expense ) , net in the statements of operations . a 10 % change in the estimate of expected volatility at december 31 , 2017 would increase or decrease the aggregate fair value of the common stock warrant liability in the amount of $ 45,000 . a 10 % change in the estimate of fair value of the common stock at december 31 , 2017 would increase or decrease the aggregate fair value of the common stock warrant liability in the amount of $ 87,000 . recently adopted accounting pronouncements in march 2016 , the financial accounting standards board , or fasb , issued accounting standards update , or asu , 2016-09 , improvements to employee share-based payment accounting . asu 2016-09 changes several aspects of the accounting for share-based payment transactions , including the income tax consequences , classification of awards as either equity or liabilities , and classification on the statement of cash flows . asu 2016-09 requires all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement and treated as discrete items in the reporting period . further , excess tax benefits are required to be classified along with other income tax cash flows as an operating activity . the guidance was effective for the company in the first quarter of 2017. adoption of this guidance did not have a significant impact to the company 's financial statements . recent accounting pronouncements not yet adopted in may 2014 , the fasb , issued asu , 2014-09 ( asc 606 ) , revenue from contracts with customers . this asu , as amended by asu 2015-14 , affects any entity that either enters into contracts with customers to transfer goods and services or enters into contracts for the transfer of nonfinancial assets . asu 2014-09 will replace most existing revenue recognition guidance in gaap when it becomes effective . the standard 's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services . in doing so , companies will need to use more judgment and make more estimates than under the currently effective guidance . these may include identifying performance obligations in the contract , estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation . asu 2014-09 is effective for exicure in the first quarter of 2018 and early adoption is permitted beginning in the first quarter of 2017. the company intends to adopt this standard on january 1 , 2018 on a modified retrospective basis and continues to analyze and assess the impact , if any , of this standard on its financial statements . in february 2016 , fasb issued asu 2016-02 , leases ( topic 842 ) , which requires lessees to recognize right-of-use assets and lease liabilities on the balance sheet . asu 2016-02 is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements . asu 2016-02 will be effective for the company beginning in the first quarter of 2019. early adoption is permitted . the company is currently evaluating the impact of adopting this standard on its financial statements . in august 2016 , the fasb issued asu 2016-15 , statement of cash flows ( topic 230 ) : classification of certain cash receipts and cash payments . asu 2016-15 addresses the classification of certain specific cash flow issues 94 including debt prepayment or extinguishment costs , settlement of certain debt instruments , contingent consideration payments made after a business combination , proceeds from the settlement of certain insurance claims and distributions received from equity method investees . asu 2016-15 is effective for the company in the first quarter of 2018 and early adoption is permitted . an entity that elects early adoption must adopt all of the amendments in the same period . the company is currently evaluating the impact of this guidance on its statement of cash flows . in may 2017 , the fasb issued asu 2017-09 , compensation - stock compensation ( topic 718 ) : scope of modification accounting . asu 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications . under the new guidance , modification accounting is required only if the fair value , the vesting conditions , or the classification of the award changes as a result of the change in terms or conditions . asu 2017-09 will be applied prospectively to awards modified on or after the adoption date . asu 2017-09 is effective for the company for fiscal years beginning after december 15 , 2017 , and interim periods within those fiscal years . early adoption is permitted . the company is currently evaluating the impact of this guidance on its financial statements . components of statements of operations revenue we have earned all of our revenue through december 31 ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | net cash used in operating activities was $ 19.8 million and $ 5.1 million for the years ended december 31 , 2017 and 2016 , respectively . the increase in cash used in operating activities of $ 14.7 million was primarily due to the cash impact of higher research and development expenses in the year ended december 31 , 2017 , the payment for legal and accounting services of approximately $ 1.5 million , which were incurred in support of a potential public offering that was abandoned during the second quarter of 2017 and also in support of registering the resale of 39,714,143 shares of our common stock issued in connection with the merger and the private placement , the payment of $ 1.5 million in connection with the northwestern university license agreements , as well as the prepayment of directors and officers liability insurance , partially offset by the receipt of the $ 10.0 million upfront payment in connection with the purdue collaboration in december 2016. investing activities net cash used in investing activities was $ 0.9 million and $ 0.4 million for the years ended december 31 , 2017 and 2016 , respectively . cash used in investing activities for each of the above-mentioned periods was primarily due to the purchase of scientific equipment . financing activities net cash provided by financing activities of $ 26.9 million during the year ended december 31 , 2017 is primarily due to the sale of common stock in the private placement . gross proceeds from the private placement of $ 31.5 million , less financing costs paid in 2017 of $ 3.7 million , were partially offset by the repayment of debt of $ 1.0 million . net cash provided by financing activities of $ 6.3 million during the year ended december 31 , 2016 is mostly due to net proceeds of $ 5.9 million from our february 2016 secured debt financing with hercules and $ 0.4 million from our january 2016 series c preferred stock offering . hercules loan and security agreement on february 17 , 2016 , we entered into a loan and security agreement with hercules .
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generally , we receive insured credit swap fees in quarterly installments over the life of the related swaps which is typically in the range of 5 to 7 years . the principal expenses of this line of business are its allocated portion of corporate-wide operating expenses , interest expense and depreciation and amortization . it also incurs direct interest expense related to the financing of our consolidated credit fund purchased investments . we enter into our insured credit swaps with an intent that they remain outstanding for the entire term of the contract . these insured credit swaps are accounted for at fair value because they do not qualify for the financial guarantee scope exception under fas no . 133 , accounting for derivative instruments and certain hedging activities , as amended ( fas 133 ) . changes in the fair value of these contracts are required to be marked to market under the requirements of fas 133 and are recorded , together with the related fixed quarterly premium payments payable to us under the insured credit swaps , under the caption net insured credit swap revenue . since our insured credit swap transactions are not actively traded securities and have no observable market price , we utilize comprehensive internally developed models to estimate changes in fair value . we expect the fair values of these insured credit swaps to fluctuate primarily based on changes in credit spreads and the credit quality of the underlying referenced entities . when we hold these insured credit swaps for the entire term of the contract , the cumulative changes in fair value will net to zero at the end of the term , provided that we do not incur credit losses on the contract . in certain circumstances , we may agree with a counterparty to terminate an insured credit swap transaction prior to its maturity ( such as on request of the counterparty or for risk management purposes , such as in connection with a deterioration of the underlying portfolio ) and may experience realized gains or losses in connection with the early termination of such transactions . in our public finance line of business , we provide financial guaranty insurance policies guaranteeing the timely payment of interest and the ultimate payment of principal on municipal debt obligations . our principal revenues in this line of business are premiums earned on our financial guaranty insurance policies and its allocated portion of corporate-wide investment income . the principal expenses of this line of business include its allocated portion of corporate-wide operating expenses , interest expense and depreciation and amortization . we also incur loss and loss adjustment expenses , related to the non-derivative exposure we insure , and policy acquisition costs , which are expenses that vary with and are 53 directly attributable to the generation of insurance premiums and are deferred and recognized over the period in which the related premiums are earned . typically , public finance premiums are received by us on an up front basis . however , they are recognized into income over the term of the underlying instrument . in our cdo asset management line of business , we focus on cdo origination , structuring and asset management . our principal revenues in this line of business are investment income , management fees , warehouse income , other credit swap revenue and premiums for credit swaps on insured equity tranches of unfunded synthetic cdos . also included is an allocated portion of corporate-wide investment income . the principal direct expenses are interest expense related to the cdo debt issued by us and the amortization of related capitalized debt issuance costs . this line of business also receives an allocated portion of corporate-wide operating expenses , interest expense and depreciation and amortization . several of our cdos are consolidated in our financial statements because we have been determined to be the primary beneficiary under fin 46 ( r ) , consolidation of variable interest entities an interpretation of arb no . 51 analyses . see results of operationscdo asset managementsupplementary information for a discussion on the accounting issues associated with consolidation . our other line of business includes business in areas and markets in which we are no longer active . principal direct items are premiums earned , loss and loss adjustment expenses and policy acquisition costs . this line of business also was allocated a portion of investment income , interest expense and operating expenses in 2006 , 2005 and 2004. beginning in 2004 , expenses were not allocated to this line of business . we believe it is more meaningful to analyze our financial performance on an annual , rather than a quarterly , basis in order to give our lines of business flexibility to select only those opportunities that meet our risk-adjusted return expectations . we believe this maximizes our profitability and allows our lines of business to avoid unfavorable pricing , credit spreads and general market conditions that may occur in any particular quarter . furthermore , during any given year we enter into a limited number of transactions in each of our lines of business and do not set corporate goals based on closing a specified number of transactions in any particular quarter or year . the transactions in which we participate are often highly negotiated and often take a significant period of time from start to finish , up to one year in public finance and up to nine months for a cdo . accordingly , our financial performance can vary significantly from quarter to quarter and the operating results for any quarter are not indicative of results for any future period . additionally , management reviews our performance using a measure known as net economic income . management believes that analyzing net economic income enhances the understanding of our results of operations by highlighting income attributable to our ongoing operating performance . story_separator_special_tag the credit fund had net assets under management of $ 25.6 million as of december 31 , 2006 , of which we owned $ 17.0 million and third party investors owned the remaining $ 8.6 million . in addition to receiving a return on our investment in the credit fund , we are paid a management fee to select and manage the assets for the credit fund 's third party investors . although the credit fund is consolidated pursuant to the requirements of fin 46 ( r ) , we do not have the right to use the assets for general operations . see results of operationsstructured credit. results of operations summary of consolidated results the following describes our consolidated financial results for the years ended december 31 , 2006 , 2005 and 2004 and our financial condition as of december 31 , 2006 and 2005. in order to understand our consolidated financial results , we perform a detailed segment by segment analysis for our lines of business and therefore , to augment the segments discussion , the following consolidated discussion has been prepared to describe ( 1 ) revenue and expense items that are allocated to our four lines of business and ( 2 ) the results of our lines of business : structured credit , public finance , cdo asset management and other . the accounting policies of our lines of business are the same as those described in the summary of critical accounting policies and estimates above . our two financial guaranty insurance lines of business , structured credit and public finance , are presented as separate lines of business . items not directly 58 attributable are allocated to each operating line of business . allocated items consist of investment income from aca financial guaranty 's investment portfolio , realized gains and losses on that investment portfolio , interest expense on the corporate debt at the holding company level , all operating expenses , non-cdo related depreciation and amortization expenses and income taxes . income and expense items that are directly attributable to a business line are recorded as such . the company 's consolidated net income for 2006 was $ 58.7 million , or $ 1.89 per diluted share , as compared to $ 28.8 million , or $ 0.96 per diluted share , in 2005 , an increase of $ 29.9 million . the company 's consolidated net income for 2005 of $ 28.8 million , or $ 0.96 per diluted share , was an increase of $ 32.6 million compared to the company 's net loss of $ ( 3.8 ) million , or $ ( 0.61 ) per diluted share , in 2004. the following table summarizes the contribution of each line of business to net consolidated income for the years 2006 , 2005 and 2004 : replace_table_token_14_th structured credit . net income increased to $ 25.3 million in 2006 compared to $ 11.0 million in 2005 primarily as a result of an increase in the volume of credit swap transactions completed in prior periods and impact of premiums received on current year originations and the full-year effect of premiums originated over the course of 2005. the increase in revenues was partially offset by increased operating expenses attributable to a reallocation of internal resources , effective january 1 , 2006 , to support the growth in this line of business . the increase in 2005 net income for this line of business compared to 2004 was the result of increased insured credit swap premiums earned partially offset by a decrease in premiums earned on traditional financial guaranty insurance . this decrease in premiums was the result of our shift in focus from traditional financial guaranty insurance to the insurance of credit swaps in this line of business . public finance . net income increased to $ 10.7 million in 2006 compared to $ 8.9 million in 2005 primarily resulting from a higher level of refunding activity , which accelerates the earnings of up front premiums paid on the refunded transactions , and slightly lower loss and loss adjustment expenses . premiums earned from refundings were $ 9.4 million in 2006 , compared to $ 6.6 million in 2005. this increase was partially offset by increased operating expenses . the increase in 2005 net income for this line of business to $ 8.9 million compared to $ 7.1 million in 2004 was the result of lower loss and loss adjustment expenses and an increase in premiums earned . the increase in our non-specific reserve was a direct result of the increase in premiums earned and application of our non-specific reserve model , and represents management 's estimate of losses on our insured book of business . cdo asset management . net income increased to $ 21.4 million in 2006 compared to $ 10.5 million in 2005 primarily as a result of an increase in fee and other income attributable to increased assets under management . in 2006 , we increased assets under management by $ 5.8 billion for a total of $ 15.7 billion at year end . we also experienced improved returns on our equity investments in various cdos . these increases were partially offset by increased operating expenses . also , in 2005 , we had greater losses in our insured credit swap and other credit swap revenues when compared to 2006 related to the valuation of these contracts under fas 133. unrealized losses in 2006 for these items were $ 0.5 million in 2006 compared to $ 4.2 million in 2005. in 2005 , we also recognized a realized loss of $ 3.3 million in other credit swap revenues as a result of a credit event on a single credit swap . net income was relatively flat when comparing 2005 to 2004 , however , the drivers of each year 's results differed . we recognized increased 59 management fees in 2005 , while in 2004 , we recognized unrealized gains
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources we are a holding company , and as such , have no direct operations of our own . our liquidity , both on a short-term basis ( for the next 12 months ) and a long-term basis ( beyond the next 12 months ) is dependent upon how much of our initial public offering proceeds we retain at the holding company level , the ability of our operating subsidiaries , which excludes our consolidated cdo entities , to pay dividends or make other payments to us , and our ability to incur indebtedness and otherwise access the capital markets . as of december 31 , 2006 , we held at our holding company approximately $ 36.9 million of the approximately $ 79.3 million in net proceeds from our initial public offering of common stock that was completed in november 2006. for further discussion regarding the balance of proceeds after december 31 , 2006 , see part ii , item 5 of this report . our principal liquidity requirement is the payment of interest on our debt and operating expenses . our outstanding indebtedness is described under indebtedness. we may also incur additional indebtedness in the future to fund acquisitions , working capital , growth in our business or for other general corporate purposes . we also may require liquidity to make periodic capital investments in our operating subsidiaries . we do not currently intend to pay dividends . in the ordinary course of our business , we evaluate our liquidity needs and capital resources in light of holding company expenses and debt-related expenses . based on the amount of dividends we expect to receive from our subsidiaries , existing cash , including the remaining proceeds from our initial public offering retained at our holding company , and availability under our revolving credit facility , management believes that we will have sufficient liquidity to satisfy our needs over the next 12 months .
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the company will increase its focus on the key therapeutic areas that meet unmet medical needs , provide the best opportunities for the business and deliver the greatest value for customers – diabetes , acute hospital care , vaccines and oncology . as part of its intensified portfolio assessment process , the company has divested a portion of its u.s. ophthalmics business and sold the u.s. marketing rights for saphris , 35 an antipsychotic indicated for the treatment of schizophrenia and bipolar i disorder in adults . the company 's portfolio assessment process is ongoing and future product divestitures may occur . in addition , in january 2014 , the company announced that it was evaluating the respective roles of merck 's animal health and consumer care businesses in the company 's strategy for long-term value creation . the company expects to complete the evaluation process and take action , if any , in 2014. the company could reach different decisions about the two businesses . the company 's re-focused research and development efforts include programs such as the company 's anti-pd-1 immunotherapy ( mk-3475 ) in oncology , which has received a breakthrough therapy designation from the u.s. food and drug administration ( the “ fda ” ) for advanced melanoma , merck 's bace inhibitor for alzheimer 's disease ( mk-8931 ) , the company 's all oral combination regimen for the treatment of chronic hepatitis c virus infection ( mk-5172/mk-8742 ) , and v503 , a nine-valent human papillomavirus ( “ hpv ” ) vaccine . in january 2014 , the company announced it has initiated the rolling submission of a biologics license application ( “ bla ” ) to the fda for mk-3475 in patients with advanced melanoma who have previously been treated with ipilimumab . during 2013 , the company received a breakthrough therapy designation for mk-5172/mk-8742 and has advanced the combination into phase 2b in a diverse range of chronic hepatitis c patients . the company has initiated phase 3 trials for its bace inhibitor ( mk-8931 ) and filed a bla with the fda for v503 . merck is pursuing emerging product opportunities independent of therapeutic area or modality and is building its biologics capabilities . the company expects to make externally sourced programs a greater component of its pipeline strategy . during 2013 , the company entered into a collaboration agreement for the development and commercialization of ertugliflozin , an investigational oral sodium glucose cotransporter ( “ sglt2 ” ) inhibitor being evaluated for the treatment of type 2 diabetes in phase 3 clinical development . the company is out-licensing or discontinuing selected late-stage clinical development assets and reducing its focus on platform technologies . during 2013 , the company out-licensed mk-1775 , an investigational treatment for certain types of ovarian cancer , and in january 2014 entered into an agreement to divest its sirna therapeutics , inc. subsidiary and related rnai technology assets . the company currently has several candidates under review with the fda : mk-5348 , vorapaxar , an investigational anti-thrombotic medicine ( also under review in the european union ( the “ eu ” ) ) ; v503 , a nine-valent hpv vaccine ; mk-8962 , corifollitropin alfa injection , an investigational fertility treatment ; mk-7243 , grastek , an investigational timothy grass pollen allergy immunotherapy tablet ( “ ait ” ) and mk-3641 , ragwitek , an investigational ragweed pollen ait . also , mk-8109 , vintafolide , an investigational cancer candidate , is under review in the eu and mk-7009 , vaniprevir , an investigational , oral twice-daily protease inhibitor for the treatment of chronic hepatitis c virus infection is under review in japan . in february 2014 , the company resubmitted its new drug application ( “ nda ” ) to the fda for mk-4305 , suvorexant , responding to the agency 's complete response letter ( “ crl ” ) received in 2013. in addition , the company anticipates resubmitting its nda application in 2014 to the fda for mk-8616 , sugammadex sodium injection , a medication for the reversal of certain muscle relaxants used during surgery for which the company received a crl in 2013 ( see “ research and development ” below ) . the company also has 12 candidates in phase 3 development and anticipates filing a new drug application ( “ nda ” ) or a bla , as applicable , with the fda with respect to several of these candidates in 2014 , including the completion of the rolling submission of the bla for mk-3475 for patients with advanced melanoma who have previously been treated with ipilimumab . in october 2013 , in connection with the implementation of company 's new global initiative , the company announced a global restructuring program ( the “ 2013 restructuring program ” ) . as part of the program , the company expects to reduce its total workforce by approximately 8,500 positions . these workforce reductions will primarily come from the elimination of positions in sales , administrative and headquarters organizations , as well as research and development . the company will also reduce its global real estate footprint and continue to improve the efficiency of its manufacturing and supply network . the company recorded total pretax costs of $ 1.2 billion in 2013 related to this restructuring program . the actions under the 2013 restructuring program are expected to be substantially completed by the end of 2015 with the cumulative pretax costs estimated to be approximately $ 2.5 billion to $ 3.0 billion . story_separator_special_tag one of these partnerships is the african comprehensive hiv/aids partnership in botswana , a collaboration with the government of botswana that was renewed in 2010 and supports botswana 's response to hiv/aids through a comprehensive and sustainable approach to hiv prevention , care , treatment , and support . privacy and data protection the company is subject to a number of privacy and data protection laws and regulations globally . the legislative and regulatory landscape for privacy and data protection continues to evolve . there has been increased attention to privacy and data protection issues in both developed and emerging markets with the potential to affect directly the company 's business , including recently enacted laws and regulations in the united states , europe , asia and latin america , and increased enforcement and litigation activity in the united states and other developed markets . operating results sales worldwide sales totaled $ 44.0 billion in 2013 , a decline of 7 % compared with $ 47.3 billion in 2012. the sales decline was driven primarily by lower sales of singulair . the patents that provided u.s. market exclusivity and market exclusivity in a number of major european markets for singulair expired in august 2012 and february 2013 , respectively , and the company experienced a significant and rapid decline in singulair sales in those markets thereafter . foreign exchange unfavorably affected global sales performance by 2 % in 2013. the revenue decline in 2013 also reflects lower sales of maxalt , cozaar and hyzaar , treatments for hypertension , temodar , clarinex , a non-sedating antihistamine , pegintron , a treatment for chronic hepatitis c , propecia , fosamax , a treatment for osteoporosis , and vytorin , a cholesterol modifying medicine . these declines were partially offset by growth in gardasil , a vaccine to help prevent certain diseases caused by four types of hpv , remicade and simponi , treatments for inflammatory diseases , janumet , a treatment for type 2 diabetes , isentress , a treatment for hiv-1 infection , dulera inhalation aerosol , a combination medicine for the treatment of asthma , and zostavax , a vaccine to help prevent shingles ( herpes zoster ) . sales in the united states were $ 18.2 billion in 2013 , a decline of 11 % compared with $ 20.4 billion in 2012. the sales decrease was driven primarily by lower sales of singulair , as well as maxalt , temodar , victrelis , an oral medicine for the treatment of chronic hepatitis c virus , and clarinex , partially offset by higher sales of gardasil , zetia , a cholesterol absorption inhibitor , and dulera inhalation aerosol . international sales were $ 25.8 billion in 2013 , a decline of 4 % compared with $ 26.9 billion in 2012. foreign exchange unfavorably affected international sales performance by 4 % in 2013. the decline was driven primarily by lower sales in the pharmaceutical segment , reflecting declines in japan , largely attributable to the unfavorable effect of foreign exchange , and europe that were partially offset by growth in the emerging markets . sales in japan declined 21 % in 2013 , to $ 3.9 billion , of which 17 % was due to the unfavorable effect of foreign exchange . the sales decline 40 reflects the ongoing impacts of the loss of the market exclusivity for several products , including cozaar and hyzaar , as well as lower sales of gardasil , reflecting the japanese government 's decision to suspend proactive recommendation of hpv vaccines , and declines in pegintron and rebetol , products for the treatment of chronic hepatitis c. these declines were partially offset by volume growth in januvia , a treatment for type 2 diabetes , nasonex , an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms , zetia , and rotateq , a vaccine to help protect against rotavirus gastroenteritis in infants and children . sales in europe declined 1 % in 2013 , to $ 9.6 billion , including a 2 % favorable effect from foreign exchange driven by ongoing generic erosion and fiscal austerity measures in this region , partially offset by growth in remicade , simponi , janumet , januvia and isentress . sales in the emerging markets grew 3 % in 2013 , to $ 7.8 billion , including a 4 % unfavorable effect from foreign exchange reflecting higher sales of vaccine , hospital , hepatitis and immunology products , partially offset by lower sales of singulair and diversified brands . total international sales represented 59 % and 57 % of total sales in 2013 and 2012 , respectively . global efforts toward health care cost containment continue to exert pressure on product pricing and market access worldwide . in many international markets , government-mandated pricing actions have reduced prices of generic and patented drugs . in addition , other austerity measures negatively affected the company 's revenue performance in 2013. the company anticipates these pricing actions , including the biennial price reductions in japan , and other austerity measures will continue to negatively affect revenue performance in 2014. in october 2013 , the company sold its active pharmaceutical ingredient ( “ api ” ) manufacturing business and , effective december 31 , 2013 , certain related products within diversified brands . in november 2013 , merck sold the u.s. rights to certain ophthalmic products and in january 2014 sold the u.s. rights to saphris . the aggregate annual sales associated with these divested assets were approximately $ 625 million . the annual sales associated with the divested products were approximately $ 425 million of which approximately $ 385 million related to the pharmaceutical segment and $ 40 million related to the consumer care segment . the annual sales associated with the divested api manufacturing business were approximately $ 200 million and related to non-segment revenues . worldwide sales were $ 47.3 billion in 2012 , a decline
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | analysis of liquidity and capital resources merck 's strong financial profile enables it to fully fund research and development , focus on external alliances , support in-line products and maximize upcoming launches while providing significant cash returns to shareholders . replace_table_token_12_th cash provided by operating activities was $ 11.7 billion in 2013 , $ 10.0 billion in 2012 and $ 12.4 billion in 2011 . cash provided by operating activities in 2013 includes a payment made by the company of $ 480 million in connection with the previously disclosed settlement of the enhance litigation ( see note 10 to the consolidated financial statements ) . cash provided by operating activities in 2012 reflects higher contributions to its defined benefit plans as compared with 2013 and 2011. cash provided by operating activities in 2012 also includes a payment of $ 960 million related to the resolution of certain litigation related to vioxx . cash provided by operating activities in 2011 includes a $ 500 million payment made to j & j as a result of the arbitration settlement , as well as net payments of approximately $ 465 million to the internal revenue service as a result of the conclusion of its examination of certain of merck 's federal income tax returns . cash provided by operating activities continues to be the company 's primary source of funds to finance operating needs , capital expenditures , treasury stock purchases and dividends paid to shareholders . global economic conditions and ongoing sovereign debt issues , among other factors , have adversely affected foreign receivables in certain european countries ( see note 5 to the consolidated financial statements ) .
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business segments for the year ended september 30 , 2020 , we served our customers through two segments : integrated solutions and services , a group entirely focused on engaging directly with end users , and applied product technologies , a group focused on developing product platforms to be sold primarily through third party channels . our segments draw from the same reservoir of leading technologies , shared manufacturing infrastructure , common business processes and corporate philosophies . the key factors used to identify our reportable segments are the organization and alignment of our internal operations , the nature of the products and services and customer type . within the integrated solutions and services segment , we primarily provide tailored solutions in collaboration with our customers backed by life‑cycle services including on‑demand water , outsourced water ( formerly 53 known as build-own-operated ) , recycle and reuse and emergency response service alternatives to improve operational reliability , performance and environmental compliance . within the applied product technologies segment , we provide a highly differentiated and scalable range of products and technologies specified by global water treatment designers , oems , engineering firms and integrators . we evaluate our business segments ' operating results based on income from operations and net income ( loss ) before interest expense , income tax benefit ( expense ) and depreciation and amortization ( “ ebitda ” ) on a segment basis . corporate activities include general corporate expenses , elimination of inter-segment transactions , interest income and expense and other unallocated charges , which have not been allocated to business segments . as such , the segment results provided herein may not be comparable to other companies . in addition , our chief operating decision maker uses adjusted ebitda of each reportable segment to evaluate the operating performance of such segments . adjusted ebitda of the reportable segments does not include certain unallocated charges that are presented within corporate activities . these unallocated charges include certain restructuring and other business transformation charges that have been incurred to align and reposition the company to the current reporting structure , acquisition related costs ( including transaction costs , integration costs and recognition of backlog intangible assets recorded in purchase accounting ) and share-based compensation charges . for the years ended september 30 , 2020 , 2019 and 2018 , our segments accounted for the following percentage of our revenues : replace_table_token_3_th organic growth drivers market growth we maintain a leading position among customers in growing industries that utilize water as a critical part of their operations or production processes , including pharmaceuticals and health sciences , microelectronics , food and beverage , hydrocarbon and chemical processing , power , general manufacturing , municipal drinking and wastewater , marine and aquatics . water treatment is an essential , non‑discretionary market that is growing in importance as access to clean water has become an international priority . underpinning this growth are a number of global , long‑term trends that have resulted in increasingly stringent effluent regulations , along with a growing demand for cleaner and sustainable waste streams for reuse . these trends include the growing global population , increasing levels of urbanization and continued global economic growth , and we have seen these trends manifest themselves within our various end markets creating multiple avenues of growth . for example , within the industrial market , water is an integral and meaningful component in the production of a wide‑range of goods spanning from consumer electronics to automobiles . our existing customer base we believe our strong brands , leading position in highly fragmented markets , scalable and global offerings , leading installed base and unique ability to provide complete treatment solutions will enable us to capture a larger share of our existing customers ' water treatment spend while expanding with existing and new customers into adjacent end‑markets and under-penetrated regions , including by investing in our sales force and cross‑selling to existing customers . we believe we are uniquely positioned to further penetrate our core markets , with over 200,000 installations across over 38,000 global customers . we maintain a customer‑intimate business model with strong brand value and provide solutions‑focused offerings capable of serving a customer 's full lifecycle water treatment needs , both in current and new geographic regions . 54 our service model we selectively target high value projects with opportunities for recurring business through service , parts and other aftermarket opportunities over the lifecycle of the process or capital equipment . in particular , we have developed internet‑connected monitoring technologies through the deployment of our waterone® service platform , which enables customers to outsource their water treatment systems and focus on their core business , offering customers system optimization , predictive and proactive service , and simplified billing and pricing . our waterone® platform also enables us to transition our customers to pricing models based on usage , which otherwise would not have been possible without technological advancement . our technology solutions provide customers with increased stability and predictability in water‑related costs , while enabling us to optimize our service route network and on demand offerings through predictive analytics , which we believe will result in market share gains , improved service levels , increased barriers to entry and reduced costs . product and technology development we develop our technologies through in‑house research , development and engineering and targeted tuck‑in , vertical market and geography‑expanding , technology-enhancing acquisitions . we have a reservoir of recently launched technologies and a strong pipeline of new offerings designed to provide customers with innovative , value‑enhancing solutions . story_separator_special_tag sales and marketing expenses ( “ s & m expense ” ) consist primarily of advertising and marketing promotions of our products , services and solutions and related personnel expenses ( including all evoqua sales and application employees ' base compensation and incentives ) , as well as sponsorship costs , consulting and contractor expenses , travel , display expenses and related amortization . we expect our sales and marketing expenses to increase as we continue to actively promote our products , services and solutions . research and development . research and development expenses ( “ r & d expense ” ) consist primarily of personnel expenses related to research and development , patents , sustaining engineering , consulting and contractor expenses , tooling and prototype materials and overhead costs allocated to such expenses . substantially all of our research and development expenses are related to developing new products and services and improving our existing products and services . to date , research and development expenses have been expensed as incurred , because the period between achieving technological feasibility and the release of products and services for sale has been short and development costs qualifying for capitalization have been insignificant . r & d expense can fluctuate depending on our determination to invest in developing new products , services and solutions and enhancing our existing products , services and solutions versus adding these capabilities through a mergers and acquisitions strategy . r & d expenditures are concentrated in our products businesses . net income ( loss ) net income ( loss ) is determined by subtracting operating expenses and interest expense from , and adding other operating income ( expense ) , equity income from our partnership interest in treated water outsourcing and income tax benefit ( expense ) to gross profit . for more information on how we determine gross profit , see “ gross profit . ” adjusted ebitda adjusted ebitda , which is a non-gaap financial measure , is one of the metrics used by management to evaluate the financial performance of our business . adjusted ebitda is defined as net income ( loss ) before interest expense , income tax benefit ( expense ) and depreciation and amortization , adjusted for the impact of certain other items , including restructuring and related business transformation costs , purchase accounting adjustment costs , non-cash share-based compensation , sponsor fees , transaction costs and other gains , losses and expenses . we present adjusted ebitda , which is not a recognized financial measure under accounting principles generally accepted in the united states ( “ gaap ” ) , because we believe it is frequently used by analysts , investors and other interested parties to evaluate companies in our industry . further , we believe it is helpful in highlighting trends in our operating results and provides greater clarity to management and our investors regarding the operational impact of long‑term strategic decisions regarding capital structure , the tax jurisdictions in which we operate and capital investments . management uses adjusted ebitda to supplement gaap measures of performance as follows : to assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance ; in our management incentive compensation which is based in part on components of adjusted ebitda ; in certain calculations under our senior secured credit facilities , which use components of adjusted ebitda . to evaluate the effectiveness of our business strategies ; to make budgeting decisions ; and 59 to compare our performance against that of other peer companies using similar measures . in addition to the above , our chief operating decision maker uses ebitda and adjusted ebitda of each reportable operating segment to evaluate the operating performance of such segments . ebitda and adjusted ebitda of the reportable operating segments does not include certain charges that are presented within corporate activities . these charges include certain restructuring and other business transformation charges that have been incurred to align and reposition the company to the current reporting structure , acquisition related costs ( including transaction costs , integration costs and recognition of backlog intangible assets recorded in purchase accounting ) and share-based compensation charges . you are encouraged to evaluate each adjustment and the reasons we consider it appropriate for supplemental analysis . in addition , in evaluating adjusted ebitda , you should be aware that in the future , we may incur expenses similar to the adjustments in the presentation of adjusted ebitda . our presentation of adjusted ebitda should not be construed as an inference that our future results will be unaffected by unusual or non‑recurring items . in addition , adjusted ebitda may not be comparable to similarly titled measures used by other companies in our industry or across different industries . the following is a reconciliation of our net income ( loss ) to adjusted ebitda : replace_table_token_4_th ( a ) restructuring and related business transformation costs adjusted ebitda is calculated prior to considering certain restructuring or business transformation events . these events may occur over extended periods of time and in some cases it is reasonably possible that they could reoccur in future periods based on reorganizations of the business , cost reduction or productivity improvement needs , or in response to economic conditions . for the periods presented such events include the following : ( i ) certain costs and expenses in connection with various restructuring initiatives , including severance costs , relocation costs , recruiting expenses , and third-party consultant costs to assist with these initiatives . this includes : ( a ) costs related to our voluntary separation plan pursuant to which approximately 220 employees accepted separation packages ; ( b ) amounts related to the company 's restructuring initiatives to reduce the cost structure and rationalize location footprint following the sale of the memcor product line ;
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows the following table summarizes the changes to our cash flows for the periods presented : replace_table_token_19_th operating activities cash flows from operating activities can fluctuate significantly from period‑to‑period as working capital needs and the timing of payments for restructuring activities and other items impact reported cash flows . net cash provided by operating activities increased to $ 158.4 million in the year ended september 30 , 2020 from $ 125.2 million in the year ended september 30 , 2019 . 74 operating cash flows in the year ended september 30 , 2020 reflect an increase in net income of $ 122.9 million from the year ended september 30 , 2019 , primarily driven by the sale of the memcor product line . the add back of non‑cash charges increased operating cash flows by $ 45.3 million for the year ended september 30 , 2020 as compared to an increase to operating cash flows of $ 132.5 million for the year ended september 30 , 2019 , resulting in an overall reduction of $ 87.2 million . this reduction in the current year was primarily driven by the adjustment for gain on sale of business , as well as decreased share-based compensation expenses and foreign currency gains , offset by an increase in depreciation and amortization expense . the aggregate of receivables , inventories , contract assets , accounts payable and contract billings provided $ 23.1 million in operating cash flows in the year ended september 30 , 2020 compared to $ 7.8 million in the prior year . the amount of cash flow generated from or used by the above mentioned accounts depends upon how effectively we manage our cash conversion cycle , which is a representation of the number of days that elapse from the date of purchase of raw materials and components to the collection of cash from customers . our cash conversion cycle can be significantly impacted by the timing of collections and payments in a period .
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the tax adjustments resulted in a net decrease to income tax expense of approximately $ 0.9 million in 2013 and zero in 2012. the tax adjustments in 2011 resulted in a reduction to the carrying value of goodwill totaling approximately $ 4.0 million due to a calculation error in the original purchase price allocation and subsequent performance of step 2 of our annual goodwill impairment analysis related to deferred income taxes and thus , ( i ) reduced deferred income taxes by approximately $ 2.7 million and ( ii ) generated a pre-tax goodwill impairment charge of approximately $ 1.4 million . further , the tax adjustments in 2011 reduced deferred tax assets by approximately $ 1.6 million that were established as a result of shared-based compensation expenses recorded previously and should have been reduced as the tax deductions were utilized . moreover , the restated amounts include previously identified and disclosed immaterial adjustments . the amounts in this item 7 of this annual report on form 10-k are reflective of the restatement which includes previously identified and disclosed immaterial adjustments . see note 2 to our consolidated financial statements included in part iv , item 15 ( a ) of this annual report on form 10-k for additional information . see part ii , item 9a of this annual report on form 10-k for information regarding our controls and procedures . overview ducommun incorporated ( “ ducommun , ” “ the company , ” “ we , ” “ us ” or “ our ” ) is a leading global provider of engineering and manufacturing services for high-performance products and high-cost-of failure applications used primarily in the aerospace , defense , industrial , natural resources , medical and other industries . we differentiate ourselves as a full-service solution-based provider , offering a wide range of value-added products and services in our primary businesses of electronics , structures and integrated solutions . we operate through two primary business units : ducommun labarge technologies ( “ dlt ” ) and ducommun aerostructures ( “ das ” ) . during 2014 , we made significant progress in our plan to de-lever the balance sheet , reduce interest expense and further our ability to refinance our debt in 2015. while 2014 saw growth in our commercial aerospace and industrial revenue , it was 26 partially offset by the continued weakness in defense revenue . revenue and backlog for our commercial aerospace business remains strong , reflecting increased build rates . highlights for the year ended december 31 , 2014 were as follows : 2014 net revenues were approximately $ 742.0 million net income was approximately $ 19.9 million , or $ 1.79 per diluted share cash generated from operating activities was approximately $ 53.4 million we made voluntary principal prepayments in aggregate of approximately $ 42.6 million on the term loan for the year ended december 31 , 2014 , ebitda and adjusted ebitda was approximately $ 83.3 million . see non-gaap financial measures below for certain information regarding ebitda and adjusted ebitda , including reconciliations of ebitda and adjusted ebitda to net income . non-gaap financial measures when viewed with our financial results prepared in accordance with accounting principles generally accepted in the united states of america ( “ gaap ” ) and accompanying reconciliations , we believe ebitda and adjusted ebitda provide additional useful information to clarify and enhance the understanding of the factors and trends affecting our past performance and future prospects . we define these measures , explain how they are calculated and provide reconciliations of these measures to the most comparable gaap measure in the tables below . ebitda , adjusted ebitda and the related financial ratios , as presented in this annual report on form 10-k ( “ form 10-k ” ) , are supplemental measures of our performance that are not required by , or presented in accordance with , gaap . they are not a measurement of our financial performance under gaap and should not be considered as alternatives to net income or any other performance measures derived in accordance with gaap , or as an alternative to net cash provided by operating activities as measures of our liquidity . the presentation of these measures should not be interpreted to mean that our future results will be unaffected by unusual or nonrecurring items . we use ebitda and adjusted ebitda non-gaap operating performance measures internally as complementary financial measures to evaluate the performance and trends of our businesses . we present ebitda , adjusted ebitda and the related financial ratios , as applicable , because we believe that measures such as these provide useful information with respect to our ability to meet our future debt service , capital expenditures , working capital requirements and overall operating performance . ebitda and adjusted ebitda have limitations as analytical tools , and you should not consider them in isolation or as substitutes for analysis of our results as reported under gaap . some of these limitations are : they do not reflect our cash expenditures , future requirements for capital expenditures or contractual commitments ; they do not reflect changes in , or cash requirements for , our working capital needs ; they do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt ; although depreciation and amortization are non-cash charges , the assets being depreciated and amortized will often have to be replaced in the future , and ebitda and adjusted ebitda do not reflect any cash requirements for such replacements ; they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows ; they do not reflect the impact on earnings of charges resulting from matters unrelated to our ongoing operations ; and other companies in our industry may calculate ebitda and adjusted ebitda differently from us , limiting their usefulness as comparative measures . story_separator_special_tag million on the embraer legacy 450/500 contracts and approximately $ 1.3 million on the boeing 777 wing tip contract which are added back to adjusted ebitda ; forward loss reserves of approximately $ 3.9 million on the embraer legacy 450/500 contracts and approximately $ 1.3 million on the boeing 777 wing tip contract ; and inventory write-offs of approximately $ 1.9 million on the embraer legacy 450/500 contracts . 38 ( 3 ) 2012 includes merger-related expenses of approximately $ 0.3 million in corporate general and administrative expenses and approximately $ 0.4 million in dlt resulting from a change in control provision for certain key executives and employees arising in connection with the labarge acquisition . ( 4 ) 2013 and 2012 include workers ' compensation insurance expenses included in gross profit and not allocated to the operating segments of approximately $ 1.2 million and approximately $ 0.6 million , respectively . ducommun aerostructures das 's net sales in 2013 increased approximately 2 % reflecting an approximate 5 % increase in commercial aerospace revenue , partially offset by an approximate 2 % decrease in military and space ( defense structures ) revenue . the das segment operating income and ebitda decreased in 2013 , primarily due to the fourth quarter charges of approximately $ 14.1 million related to the embraer legacy 450/500 contracts and boeing 777 wing tip contracts which was partially off set by increased sales volume and lower accrued compensation and benefit costs . ducommun labarge technologies dlt 's net sales in 2013 decreased approximately 4 % reflecting an approximate 23 % decrease in non-aerospace and defense revenue , partially offset by an approximate 8 % increase in defense technologies and an approximate 6 % increase in commercial aerospace revenue . dlt 's segment operating income and ebitda decreased in 2013 primarily due to lower operating margins from reduced revenues that was partially offset by lower accrued compensation and benefit costs . corporate general and administrative cg & a expenses increased in 2013 primarily due to an approximate $ 0.6 million related to a workers ' compensation insurance payroll audit and an approximate $ 0.5 million related to our debt repricing transaction and increased professional fees , partially offset by lower accrued compensation and benefits costs . liquidity and capital resources story_separator_special_tag style= `` font-family : inherit ; font-size:10pt ; `` > during 2013 primarily due to voluntary principal prepayments on our term loan of approximately $ 42.6 million during 2014 compared to approximately $ 30.0 million during 2013 . in addition , 2013 included a final payment of approximately $ 3.0 million on a promissory note related to a prior acquisition . 2013 ( as restated ) compared to 2012 ( as restated ) net cash provided by operating activities in 2013 compared to 2012 reflects lower net income , partially off-set by better working capital management , primarily in inventory and accounts receivable . the improvements in working capital management were off-set by payments in accrued compensation from 2012 and timing differences related to other current assets . net cash used in investing activities of approximately $ 12.3 million and approximately $ 15.8 million in 2013 and 2012 , respectively , included capital expenditures , principally to support new contract awards at das and dlt . net cash used in financing activities during 2013 and 2012 included $ 31.4 million and $ 26.7 million , respectively , of voluntary principal prepayments on our term loan , partially offset by cash from stock option exercises in 2013. in addition , 2013 included a final payment of $ 3.0 million on a promissory note related to a prior year acquisition . contractual obligations a summary of our contractual obligations at december 31 , 2014 was as follows ( in thousands ) : 40 replace_table_token_15_th ( 1 ) as of december 31 , 2014 , we recorded approximately $ 2.8 million in long-term liabilities related to uncertain tax positions . we are not able to reasonably estimate the timing of the long-term payments , or the amount by which our liability may increase or decrease over time , therefore , the liability or uncertain tax positions has not been included in the contractual obligations table . we have estimated that the fair value of our indemnification obligations as insignificant based upon our history with such obligations and insurance coverage and have included no such obligation in the table above . our ultimate liability with respect to groundwater contamination at certain das facilities will depend upon a number of factors , including changes in existing laws and regulations , the design and cost of construction , operation and maintenance activities , and the allocation of liability among potentially responsible parties . the above table does not include obligations related to these matters . see note 14 to our consolidated financial statements included in part iv , item 15 ( a ) of this annual report on form 10-k for discussion of our environmental liabilities . off-balance sheet arrangements our off-balance sheet arrangements consist of operating leases and indemnities . critical accounting policies critical accounting policies are those accounting policies that can have a significant impact on the presentation of our financial condition and results of operations and that require the use of subjective estimates based upon past experience and management 's judgment . because of the uncertainty inherent in such estimates , actual results may differ from these estimates . below are those policies applied in preparing our financial statements that management believes are the most dependent on the application of estimates and assumptions . see note 1 to our consolidated financial statements included in part iv , item 15 ( a ) of this annual report on form 10-k for additional accounting policies . revenue recognition except as described below , we recognize revenue , including revenue from products sold under long-term contracts , when persuasive evidence of an arrangement exists , the price is fixed or determinable ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | available liquidity total debt , the weighted-average interest rate , cash and cash equivalents and available credit facilities were as follows : replace_table_token_14_th we made voluntary principal prepayments totaling approximately $ 42.6 million on our term loan during 2014. we expect to continue to make voluntarily prepayments during 2015 and we expect to refinance the term loan in 2015 , market conditions permitting , funded by cash generated from operations . in march 2013 , we executed an amendment to our credit facilities which completed a repricing of our term loan and revolving credit facility . the repricing reduced the interest rate spread on the term loan and revolving credit facility by 50 basis points and the interest rate floor by 25 basis points under the libor rate or the alternate base rate . the libor rate has a floor of 1.00 % plus 3.75 % . the alternate base rate has a floor of 2.00 % plus 2.75 % . the alternate base rate is the greater of the ( a ) prime rate and ( b ) federal funds rate plus 0.5 % . our term loan matures on june 28 , 2017 , and our $ 60.0 million revolving credit facility matures on june 28 , 2016 . the revolving credit facility and term loan covenants require ebitda of more than $ 50.0 million and a maximum leverage ratio under certain circumstances , as well as annual limitations on capital expenditures and limitations on future disposition of 39 property , investments , acquisitions , repurchase of stock , dividends , and outside indebtedness .
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overall , concerts attendance grew by 6.5 million to nearly 93 million fans , a record for the company , and an increase of 8 % over the prior year . we continued to expand our global festival portfolio in 2018 , adding brands , including isle of wight , to our strong roster and growing total festival attendance . our amphitheater shows were strong in 2018 as well , with the dave matthews band , jason aldean and kendrick lamar all playing to sold out audiences over the summer . the growth of our amphitheater onsite business continued in 2018 , with a focus on expanding our food and beverage point of sale systems , optimizing beverage sizing and pricing , and developing new premium programs for parking and vip areas . these programs helped grow our ancillary revenue per fan at our amphitheaters by approximately $ 3 in 2018. another of our ongoing priorities is to grow our ticket revenue by optimizing ticket pricing based on demand . we saw success in this area globally this year , by increasing the price for our best available seats in our amphitheaters and arenas by double-digits . our concerts operating results for the year improved over the prior year largely due to the impact of these business improvements and strategic initiatives . we will continue to look for expansion opportunities , both domestically and internationally , as well as ways to market our events more effectively , in order to continue to expand our fan base and geographic reach and thereby sell more tickets and onsite products . our sponsorship & advertising segment revenue for the year was up $ 58.8 million , or 13 % , on a reported basis as compared to last year , or $ 56.7 million , also 13 % , without the impact of changes in foreign exchange rates . in 2018 , we 28 increased our strategic sponsors globally , and grew revenue for these partners by double-digits . in our north america market , we continue to secure deals with innovative , market-leading brands . our investment in new venue and festival products has grown our onsite sponsorship revenue while we develop new streaming opportunities and other content to support our online business . in europe , we capitalized on our strong network of festivals , growing our sponsorship revenue on existing shows while adding revenue streams for newly-acquired events . we believe that our extensive onsite and online reach , global venue distribution network , artist relationships , ticketing operations and live entertainment content are the keys to securing long-term sponsorship agreements with major brands , and we plan to expand and enhance these assets while extending further into new markets internationally . our ticketing segment revenue for 2018 increased by $ 183.1 million , or 14 % , on a reported basis as compared to last year , or $ 181.1 million , a 13 % increase , without the impact of changes in foreign exchange rates . this increase was largely due to a 6 % growth in fee-bearing ticket sales globally to over 217 million tickets in 2018 , largely driven by increased sales for concert events . our digital ticketing initiative continues to accelerate : we have installed our presence system in over 200 venues in north america through the end of 2018 , with approximately 40 million fans entering venues via the platform . app installations increased by over 40 % during the year , creating additional marketing opportunities for our company and driving conversion from search and discovery to purchase . on the mobile front , over 40 % of our total tickets were sold via mobile and tablet devices in 2018 , and our total mobile ticket sales increased by 35 % year-over-year . operating results for ticketing were up this year due to improved business performance as well as the impact of the legal settlement accrued in 2017. we will continue to implement new features to drive further expansion of mobile ticket transactions and invest in initiatives aimed at improving the ticket search , purchase and transfer process . as a result , we expect to continue to attract more ticket buyers and enhance the overall fan and venue/artist client experience . segment overview our reportable segments are concerts , sponsorship & advertising and ticketing . concerts our concerts segment principally involves the global promotion of live music events in our owned or operated venues and in rented third-party venues , the operation and management of music venues , the production of music festivals across the world , the creation of associated content and the provision of management and other services to artists . while our concerts segment operates year-round , we experience higher revenue during the second and third quarters due to the seasonal nature of shows at our outdoor amphitheaters and festivals , which primarily occur from may through october . revenue and related costs for events are generally deferred and recognized when the event occurs . all advertising costs incurred during the year for shows in future years are expensed at the end of the year . concerts direct operating expenses include artist fees , event production costs , show-related marketing and advertising expenses , along with other costs . to judge the health of our concerts segment , we primarily monitor the number of confirmed events and fan attendance in our network of owned or operated and third-party venues , talent fees , average paid attendance , market ticket pricing , advance ticket sales and the number of major artist clients under management . in addition , at our owned or operated venues and festivals , we monitor ancillary revenue per fan and premium ticket sales . for business that is conducted in foreign markets , we also compare the operating results from our foreign operations to prior periods without the impact of changes in foreign exchange rates . story_separator_special_tag we generally do not repatriate these funds , but if we did , we would need to accrue and pay united states state income taxes as well as any applicable foreign withholding or transaction taxes on future repatriations . we may from time to time enter into borrowings under our revolving credit facility . if the original maturity of these borrowings is 90 days or less , we present the borrowings and subsequent repayments on a net basis in the statement of cash flows to better represent our financing activities . our balance sheet reflects total net debt of $ 2.8 billion and $ 2.3 billion at december 31 , 2018 and 2017 , respectively . our weighted-average cost of debt , excluding the unamortized debt discounts and debt issuance costs on our term loans and notes , was 4.2 % at december 31 , 2018 . our cash and cash equivalents are held in accounts managed by third-party financial institutions and consist of cash in our operating accounts and invested cash . cash held in interest-bearing operating accounts in many cases exceeds the federal deposit insurance corporation insurance limits . the invested cash is in interest-bearing funds consisting primarily of bank deposits and money market funds . while we monitor cash and cash equivalents balances in our operating accounts on a regular basis and adjust the balances as appropriate , these balances could be impacted if the underlying financial institutions fail . to date , we have experienced no loss or lack of access to our cash and cash equivalents ; however , we can provide no assurances that access to our cash and cash equivalents will not be impacted by adverse conditions in the financial markets . for our concerts segment , we generally receive cash related to ticket revenue at our owned or operated venues and festivals in advance of the event , which is recorded in deferred revenue until the event occurs . with the exception of some upfront costs and artist deposits , which are recorded in prepaid expenses until the event occurs , we pay the majority of event-related expenses at or after the event . we view our available cash as cash and cash equivalents , less ticketing-related client cash , less event-related deferred revenue , less accrued expenses due to artists and cash collected on behalf of others , plus event-related prepaid expenses . this is essentially our cash available to , among other things , repay debt balances , make acquisitions and finance capital expenditures . our intra-year cash fluctuations are impacted by the seasonality of our various businesses . examples of seasonal effects include our concerts segment , which reports the majority of its revenue in the second and third quarters . cash inflows and outflows depend on the timing of event-related payments but the majority of the inflows generally occur prior to the event . see “ —seasonality ” below . we believe that we have sufficient financial flexibility to fund these fluctuations and to access the global capital markets on satisfactory terms and in adequate amounts , although there can be no assurance that this will be the case , and capital could be less accessible and or more costly depending on economic conditions at the time . we expect cash flows from operations and borrowings under our senior secured credit facility , along with other financing alternatives , to satisfy working capital requirements , capital expenditures and debt service requirements for at least the succeeding year . 38 we may need to incur additional debt or issue equity to make other strategic acquisitions or investments . there can be no assurance that such financing will be available to us on acceptable terms or at all . we may make significant acquisitions in the near term , subject to limitations imposed by our financing agreements and market conditions . the lenders under our revolving loans consist of banks and other third-party financial institutions . while we currently have no indications or expectations that such lenders will be unable to fund their commitments as required , we can provide no assurances that future funding availability will not be impacted by adverse conditions in the financial markets . should an individual lender default on its obligations , the remaining lenders would not be required to fund the shortfall , resulting in a reduction in the total amount available to us for future borrowings , but would remain obligated to fund their own commitments . sources of cash senior secured credit facility in march 2018 , we amended our term loan b under the senior secured credit facility to reduce the applicable interest rate . at december 31 , 2018 , our senior secured credit facility consists of ( i ) a $ 190 million term loan a , ( ii ) a $ 970 million term loan b and ( iii ) a $ 365 million revolving credit facility . subject to certain conditions , we have the right to increase the facility by an amount equal to the sum of $ 625 million and the aggregate principal amount of voluntary prepayments of the term b loans and permanent reductions of the revolving credit facility commitments , in each case , other than from proceeds of long-term indebtedness , and additional amounts so long as the senior secured leverage ratio calculated on a pro-forma basis ( as defined in the credit agreement ) is no greater than 3.25 x. the revolving credit facility provides for borrowings up to the amount of the facility with sublimits of up to ( i ) $ 150 million for the issuance of letters of credit , ( ii ) $ 50 million for swingline loans , ( iii ) $ 200 million for borrowings in euros or british pounds and ( iv ) $ 50 million for borrowings in one or more other approved currencies . the senior secured credit facility is secured by
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | loss on extinguishment of debt we recorded a loss on extinguishment of debt of $ 14.0 million for the year ended december 31 , 2016 in connection with the refinancing of the term loans under our senior secured credit facility and the redemption of our 7.0 % senior notes in october 2016. these obligations were paid with proceeds from the amended senior secured credit facility and the issuance of 4.875 % senior notes due 2024. there were no significant losses on extinguishment of debt recorded in 2018 or 2017. equity in losses ( earnings ) of nonconsolidated affiliates equity in losses ( earnings ) of nonconsolidated affiliates for the year ended december 31 , 2016 includes impairment charges of $ 16.5 million primarily related to investments in a digital content company and an online merchandise company both located in the united states . there were no significant impairments of nonconsolidated affiliates recorded in 2018 or 2017. other expense ( income ) , net other expense ( income ) , net was expense of $ 12.2 million and $ 10.8 million for the years ended december 31 , 2018 and 2016 , respectively , and includes net foreign exchange rate losses of $ 11.6 million and $ 8.8 million , respectively , and was income of $ 0.1 million for the year ended december 31 , 2017 and includes net foreign exchange rate gains of $ 3.1 million . the net foreign exchange rate gains and losses result primarily from revaluation of certain foreign currency denominated net assets held internationally . income taxes for the year ended december 31 , 2018 , we had a net tax expense of $ 40.8 million on income before income taxes of $ 131.1 million compared to a net tax benefit of $ 17.2 million on a loss before income taxes of $ 9.4 million for 2017 .
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at december 31 , 2000 , 1999 and 1998 , investment securities totaled $ 81.6 million , $ 79.8 million and $ 51.4 million , respectively . the increase of investment securities in 2000 was primarily attributable to the increase in unrealized gain on securities available for sale of $ 1.9 million from december 31 , 1999 to december 31 , 2000. the increase in 1999 compared with 1998 was primarily attributable to the investment of additional deposit funds and the deposits and investment securities acquired from first american . common shareholders ' equity was $ 29.4 million , $ 28.5 million and $ 23.8 million at december 31 , 2000 , 1999 and 1998 , respectively . the increase in common shareholder 's equity for the year ended december 31 , 2000 reflects earnings retention and an increase in the unrealized gain on securities available for sale offset by the purchase of treasury stock and payment of dividends . -19- results of operation net interest income net interest income represents the amount by which interest income on interest-earning assets , including securities and loans , exceeds interest expense incurred on interest-bearing liabilities , including deposits and other borrowed funds . net interest income is the principal source of the company 's earnings . interest rate fluctuations , as well as changes in the amount and type of earning assets and liabilities , combine to affect net interest income . 2000 versus 1999. net interest income increased from $ 11.1 million in 1999 to $ 12.3 million in 2000 , an increase of $ 1.2 million or 11.0 % , primarily due to a growth in interest income of $ 7.4 million , or 34.5 % , offset by an increase in interest expense of $ 6.2 million , or 59.4 % . this resulted in net interest margins of 3.44 % and 3.93 % and net interest spreads of 2.72 % and 3.12 % for the years ended december 31 , 2000 and 1999 , respectively . the increase in net interest income for 2000 was primarily due to growth in average loans of $ 54.3 million or 25.4 % and growth in average investment securities of $ 26.6 million or 45.7 % , which contributed $ 5.7 million and $ 2.0 million , respectively , to the increase in total interest income . net interest income was negatively affected by lower yields on both loans and securities . the increase in interest expense was due primarily to an increase in average interest-bearing deposits of $ 64.0 million or 28.2 % , along with an increase in cost of funds from 4.55 % in 1999 to 5.42 % in 2000. for the year ended december 31 , 2000 the company also had an increase in average other borrowed funds and long-term debt of $ 8.5 million and $ 5.4 million respectively . 1999 versus 1998. net interest income increased from $ 9.4 million in 1998 to $ 11.1 million in 1999 , an increase of $ 1.7 million or 17.5 % , primarily due to growth in interest income of $ 3.2 million . this increase was partially offset by an increase in interest expense of $ 1.6 million . this resulted in net interest margins of 3.93 % and 4.07 % and net interest spreads of 3.12 % and 3.18 % for 1999 and 1998 , respectively . the increase in net interest income for 1999 was primarily due to growth in average loans of $ 44.0 million or 25.9 % and growth in average investment securities of $ 10.3 million or 21.5 % , which contributed $ 2.9 million and $ 522,000 , respectively , to the increase in total interest income . net interest income was negatively affected by lower yields on both loans and securities . the company also decreased federal funds from an average $ 12.9 million in 1998 to $ 7.7 million in 1999 , causing a decrease in federal funds interest income of $ 304,000 . -20- the following table presents for the periods indicated the total dollar amount of interest income from average interest-earning assets and the resultant yields , as well as the interest expense on average interest-bearing liabilities , expressed both in dollars and rates . no tax equivalent adjustments were made and all average balances are yearly average balances . nonaccruing loans have been included in the tables as loans carrying a zero yield . replace_table_token_4_th -21- the following schedule presents the dollar amount of changes in interest income and interest expense for the major components of interest-earning assets and interest-bearing liabilities and distinguishes between the increase related to higher outstanding balances and the volatility of interest rates . for purposes of this table , changes attributable to both rate and volume , which can be segregated , have been allocated . years ended december 31 , 2000 vs. 1999 1999 vs. 1998 increase ( decrease ) due to increase ( decrease ) due to volume rate total volume rate total ( dollars in thousands ) interest-earnings assets : loans $ 4,438 $ 1,299 $ 5,737 $ 3,768 $ ( 831 ) $ 2,937 securities 1,656 307 1,963 669 ( 147 ) 522 federal funds sold ( 214 ) 38 ( 176 ) ( 275 ) ( 29 ) ( 304 ) interest-bearing deposits in other financial institutions ( 75 ) ( 75 ) 46 ( 1 ) 45 total increase ( decrease ) in interest income 5,805 1,644 7,449 4,208 ( 1,008 ) 3,200 interest-bearing liabilities : now , savings and money market accounts 769 701 1,470 534 22 556 time deposits 2,112 1,456 3,568 1,326 ( 516 ) 810 other borrowed funds 452 146 598 99 90 189 long-term debt 600 600 total increase ( decrease ) in interest expense 3,933 2,303 6,236 1,959 ( 404 ) 1,555 increase ( decrease ) in net interest income $ 1,872 $ ( 659 story_separator_special_tag loans where the interest payments jeopardize the collection of principal are placed on nonaccrual status , unless the loan is both well secured and in the process of collection . cash payments received while a loan is classified as nonaccrual is recorded as a reduction of principal as long as doubt exists as to collection . the company is sometimes required to revise a loan 's interest rate or repayment terms in a troubled debt restructuring , however , the company had no restructured loans at either december 31 , 2000 , december 31 , 1999 or december 31 , 1998. in addition to an internal loan review , the company retains ibs for an annual external review to evaluate the loan portfolio . the company maintains current appraisals on loans secured by real estate , particularly those categorized as nonperforming loans and potential problem loans . in instances where updated appraisals reflect reduced collateral values , an evaluation of the borrower 's overall financial condition is made to determine the need , if any , for possible write-downs or appropriate additions to the allowance for loan losses . the company records other real estate at fair value at the time of acquisition , less estimated costs to sell . the following table presents information regarding nonperforming assets at the dates indicated : replace_table_token_5_th the company has adopted statement of financial accounting standards ( sfas ) no . 114 , accounting by creditors for impairment of a loan , as amended by sfas no . 118 , accounting for creditors for impairment of a loan- income recognition and disclosures . under sfas no . 114 , as amended , a loan is considered impaired based on current information and events , if it is probable that the company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement . the measurement of impaired loans is based on the present value of expected future cash flows discounted at the loan 's effective interest rate or the loan 's observable market price or based on the fair value of the collateral if the loan is collateral-dependent . the implementation of sfas no . 114 did not have a material adverse affect on the company 's financial statements . -27- allowance for loan losses the allowance for loan losses is a reserve established through charges to earnings in the form of a provision for loan losses . management has established an allowance for loan losses , which it believes , is adequate for estimated losses in the company 's loan portfolio . based on an evaluation of the loan portfolio , management presents a quarterly review of the allowance for loan losses to the company 's board of directors , indicating any change in the allowance since the last review and any recommendations as to adjustments in the allowance . in making its evaluation , management considers the diversification by industry of the company 's commercial loan portfolio , the effect of changes in the local real estate market on collateral values , the results of recent regulatory examinations , the effects on the loan portfolio of current economic indicators and their probable impact on borrowers , the amount of charge-offs for the period , the amount of nonperforming loans and related collateral security , the evaluation of its loan portfolio through an annual external loan review conducted by ibs and the annual examination of the company 's financial statements by its independent auditors . charge-offs occur when loans are deemed to be uncollectible . the company follows an internal loan review program to evaluate the credit risk in the loan portfolio . in addition , the company contracts with ibs to annually perform an external loan review . through the loan review process , the company maintains an internally classified loan list , which , along with the delinquency list of loans , helps management assess the overall quality of the loan portfolio and the adequacy of the allowance for loan losses . loans internally classified as substandard or in the more severe categories of doubtful or loss are those loans that at a minimum have clear and defined weaknesses such as a highly-leveraged position , unfavorable financial ratios , uncertain repayment sources or poor financial condition , which may jeopardize recoverability of the debt . at december 31 , 2000 , the company had $ 9.6 million of such loans compared with $ 7.5 million at december 31 , 1999 , a 28.0 % increase . this increase is due primarily to the classification of two credits of approximately $ 1.6 million in loans as substandard during the fourth quarter 2000. these classifications were made due to cash flow deficiencies in these lines of credits and are not expected to remain classified as substandard for an extended period of time . in addition to the internally classified loan list and delinquency list of loans , the company maintains a separate watch list which further aids the company in monitoring loan portfolios . watch list loans show warning elements where the present status portrays one or more deficiencies that require attention in the short term or where pertinent ratios of the loan account have weakened to a point where more frequent monitoring is warranted . these loans do not have all of the characteristics of a classified loan ( substandard or doubtful ) but do show weakened elements as compared with those of a satisfactory credit . the company reviews these loans to assist in assessing the adequacy of the allowance for loan losses . at december 31 , 2000 , the company had $ 2.2 million of such loans compared with $ 3.0 million at december 31 , 1999 , a 26.7 % decrease . in order to determine the adequacy of the allowance for loan losses , management considers the risk classification or delinquency status of loans
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | capital resources and liquidity capital management consists of providing equity to support both current and future operations . the company is subject to capital adequacy requirements imposed by the federal reserve and the bank is subject to capital adequacy requirements imposed by the fdic and the tdb . both the federal reserve and the fdic have adopted risk-based capital requirements for assessing bank holding company and bank capital adequacy . these standards define capital and establish minimum capital requirements in relation to assets and off-balance sheet exposure , adjusted for credit risk . the risk-based capital standards currently in effect are designed to make regulatory capital requirements more sensitive to differences in risk profiles among bank holding companies and banks , to account for off-balance sheet exposure and to minimize disincentives for holding liquid assets . assets and off-balance sheet items are assigned to broad risk categories , each with appropriate relative risk weights . the resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items . the risk-based capital standards issued by the federal reserve require all bank holding companies to have tier 1 capital of at least 4.0 % and total risk-based capital ( tier 1 and tier 2 ) of at least 8.0 % of total risk-adjusted assets . tier 1 capital generally includes common shareholders ' equity and qualifying perpetual preferred stock together with related surpluses and retained earnings , less deductions for goodwill and various other intangibles . tier 2 capital may consist of a limited amount of intermediate-term preferred stock , a limited amount of term subordinated debt , certain hybrid capital instruments and other debt securities , perpetual preferred stock not qualifying as tier 1 capital , and a limited amount of the general valuation allowance for loan losses . the sum of tier 1 capital and tier 2 capital is total risk-based capital .
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selling and administrative expense for fiscal 2013 increased 1.6 % to $ 281.3 million , or 28.3 % of net sales , compared to $ 276.8 million , or 29.4 % of net sales , for fiscal 2012. the increase was primarily attributable to higher store-related expense , excluding occupancy , as a result of new store openings and increased employee labor and benefit-related expense . operating income for fiscal 2013 increased 82.6 % to $ 47.4 million , or 4.8 % of net sales , compared to $ 26.0 million , or 2.8 % of net sales , for fiscal 2012. the higher operating income primarily reflects higher net sales and higher merchandise margins , partially offset by increased selling and administrative expense . results of operations the following table sets forth selected items from our consolidated statements of operations by dollar and as a percentage of our net sales for the periods indicated : replace_table_token_8_th ( 1 ) fiscal 2013 , 2012 and 2011 each included 52 weeks . 28 ( 2 ) in fiscal 2013 , we recorded a pre-tax charge of $ 1.3 million reflecting an accrual for legal settlements , of which $ 0.3 million was classified as a reduction to net sales and $ 1.0 million was classified as selling and administrative expense . this charge reduced net income in fiscal 2013 by $ 0.8 million , or $ 0.04 per diluted share . ( 3 ) cost of sales includes the cost of merchandise , net of discounts or allowances earned , freight , inventory reserves , buying , distribution center expense , including depreciation , and store occupancy expense . store occupancy expense includes rent , amortization of leasehold improvements , common area maintenance , property taxes and insurance . ( 4 ) selling and administrative expense includes store-related expense , other than store occupancy expense , as well as advertising , depreciation and amortization , expense associated with operating our corporate headquarters and impairment charges , if any . ( 5 ) in fiscal 2012 , we recorded a pre-tax charge related to store closing costs of $ 1.2 million . this charge was included in selling and administrative expense , and reduced net income in fiscal 2012 by $ 0.8 million , or $ 0.03 per diluted share . ( 6 ) in fiscal 2013 , 2012 and 2011 , we recorded pre-tax non-cash impairment charges of $ 0.1 million , $ 0.2 million and $ 2.1 million , respectively , related to certain underperforming stores . these impairment charges are included in selling and administrative expense , and reduced net income in fiscal 2013 , 2012 and 2011 by $ 44,000 , or $ 0.00 per diluted share , $ 0.1 million , or $ 0.01 per diluted share , and $ 1.5 million , or $ 0.07 per diluted share , respectively . ( 7 ) same store sales for a period reflect net sales from stores that operated throughout the period as well as the full corresponding prior year period . fiscal 2013 compared to fiscal 2012 net sales . net sales increased by $ 52.8 million , or 5.6 % , to $ 993.3 million for fiscal 2013 from $ 940.5 million for fiscal 2012. the change in net sales was primarily attributable to the following : same store sales increased 3.9 % for fiscal 2013 versus fiscal 2012. we believe our higher same store sales reflected favorable customer response to changes in our merchandise offering and new marketing initiatives , higher demand for firearm and ammunition products , and improved sales of winter merchandise in the first quarter of fiscal 2013 as a result of more favorable weather compared to unseasonably warm winter weather experienced in the first quarter of fiscal 2012. same store sales for a period reflect net sales from stores that operated throughout the period as well as the full corresponding prior year period . added sales from new stores reflected the opening of 31 new stores since january 1 , 2012 , partially offset by a reduction in closed store sales . while we experienced a slight decline in customer transaction levels in our retail stores in fiscal 2013 when compared with fiscal 2012 , the average sale per transaction increased primarily as a result of changes in our sales mix and merchandise offering . store count at the end of fiscal 2013 was 429 versus 414 at the end of fiscal 2012. we opened 17 new stores , three of which were relocations , and closed two stores , both of which were relocations , in fiscal 2013. for fiscal 2014 , we expect to open approximately 15 net new stores . gross profit . gross profit increased by $ 25.9 million to $ 328.7 million in fiscal 2013 from $ 302.8 million in fiscal 2012. gross profit as a percentage of net sales in fiscal 2013 was 33.1 % compared with 32.2 % during fiscal 2012. the change in gross profit was primarily attributable to the following : net sales increased by $ 52.8 million in fiscal 2013 compared to the prior year . merchandise margins , which exclude buying , occupancy and distribution expense , increased 50 basis points versus fiscal 2012 , when merchandise margins decreased 24 basis points versus fiscal 2011. the improvement primarily reflected a sales mix shift to higher-margin winter product categories as a result of favorable winter weather in the first quarter of fiscal 2013 compared with the same period in fiscal 2012 , combined with sales of firearm and ammunition products at higher margins during fiscal 2013. store occupancy expense for fiscal 2013 increased by $ 3.5 million year over year due primarily to the increase in store count . store occupancy expense as a percentage of net sales in fiscal 2013 decreased by ten basis points compared with fiscal 2012 . story_separator_special_tag in fiscal 2011 and 2012 , we paid quarterly cash dividends of $ 0.075 per share of outstanding common stock , for an annual rate of $ 0.30 per share . in fiscal 2013 , we paid quarterly cash dividends of $ 0.10 per share of 35 outstanding common stock , for an annual rate of $ 0.40 per share . in the first quarter of fiscal 2014 , our board of directors declared a quarterly cash dividend of $ 0.10 per share of outstanding common stock , which will be paid on march 21 , 2014 to stockholders of record as of march 7 , 2014. as of december 29 , 2013 , a total of $ 9.6 million remained available for share repurchases under our share repurchase program . we consider several factors in determining when and if we make share repurchases including , among other things , our alternative cash requirements , existing business conditions and the market price of our stock . we believe we will be able to fund our cash requirements from cash and cash equivalents on hand , operating cash flows and borrowings from our revolving credit facility , for at least the next twelve months . however , our ability to satisfy our cash requirements depends upon our future performance , which in turn is subject to general economic conditions and regional risks , as well as financial , business and other factors affecting our operations , including factors beyond our control . there is no assurance that we will be able to generate sufficient cash flows or that we will be able to maintain our ability to borrow under our revolving credit facility . off-balance sheet arrangements and contractual obligations . our material off-balance sheet arrangements are operating lease obligations and letters of credit . we excluded these items from the balance sheet in accordance with accounting principles generally accepted in the united states of america ( gaap ) . a summary of our operating lease obligations and letter of credit commitments by fiscal year is included in the table below . additional information regarding our operating leases is available in item 2 , properties and note 8 , lease commitments , of the notes to consolidated financial statements included in item 8 , financial statements and supplementary data , of this annual report on form 10-k. our future obligations and commitments as of december 29 , 2013 , include the following : replace_table_token_13_th capital lease obligations , which include imputed interest , consist principally of leases for some of our distribution center delivery tractors , management information systems hardware and point-of-sale equipment for our stores . payments for these lease obligations are provided by cash flows generated from operations or through borrowings from our revolving credit facility . operating lease commitments consist principally of leases for our retail store facilities , distribution center and corporate office . these leases frequently include options which permit us to extend the terms beyond the initial fixed lease term . with respect to most of those leases , we intend to renegotiate those leases as they expire . 36 operating lease commitments also include a lease commitment for a building adjacent to our corporate office . the lease term for this property commenced in 2009 and the primary term expires on february 28 , 2019. in accordance with terms of the lease agreement , we are committed to the construction of a new retail building on the premises before the primary term expires in 2019. we are not yet able to determine the ultimate amount of the construction commitment . other occupancy expense includes estimated property maintenance fees and property taxes for our stores , distribution center and corporate headquarters . other liabilities consist principally of actuarially-determined reserve estimates related to self-insurance liabilities , a contractual obligation for the surviving spouse of robert w. miller , our co-founder , and asset retirement obligations related to the removal and retirement of leasehold improvements for certain stores upon termination of their leases . periodic interest payments on the credit agreement are not included in the preceding table because interest expense is based on variable indices , and the balance of our credit agreement fluctuates daily depending on operating , investing and financing cash flows . assuming no changes in our revolving credit facility debt or interest rates as of the fiscal 2013 year-end , our projected annual interest payments would be approximately $ 1.1 million . issued and outstanding letters of credit were $ 0.9 million at december 29 , 2013 , and were related primarily to securing insurance program liabilities . in the ordinary course of business , we enter into arrangements with vendors to purchase merchandise in advance of expected delivery . because most of these purchase orders do not contain any termination payments or other penalties if cancelled , they are not included as outstanding contractual obligations . critical accounting estimates our critical accounting estimates are included in our significant accounting policies as described in note 2 of the consolidated financial statements included in item 8 , financial statements and supplementary data , of this annual report on form 10-k. those consolidated financial statements were prepared in accordance with gaap . critical accounting estimates are those that we believe are most important to the portrayal of our financial condition and results of operations . the preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities , revenue and expense . our estimates are evaluated on an ongoing basis and drawn from historical experience , current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared . actual results may differ from our estimates . management believes that the following accounting estimates reflect the more significant judgments and estimates we use in preparing our consolidated financial statements . valuation of merchandise inventories ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources our principal liquidity requirements are for working capital , capital expenditures and cash dividends . we fund our liquidity requirements primarily through cash and cash equivalents on hand , cash flows from operations and borrowings from our revolving credit facility . we believe our cash and cash equivalents on hand , future cash flows from operations and borrowings from our revolving credit facility will be sufficient to fund our cash requirements for at least the next 12 months . we ended fiscal 2013 with $ 9.4 million of cash and cash equivalents compared with $ 7.6 million in fiscal 2012. after reducing our long-term debt by $ 16.0 million , or 25.2 % , during fiscal 2012 , we further decreased our long-term debt by $ 4.5 million , or 9.5 % , during fiscal 2013 to $ 43.0 million from $ 47.5 million at the end of fiscal 2012. the following table summarizes our cash flows from operating , investing and financing activities for each of the past three fiscal years : replace_table_token_9_th the seasonality of our business historically provides greater cash flows from operations during the holiday and winter selling season . we use operating cash flows and borrowings under our revolving credit facility to fund inventory increases in anticipation of the holidays and our inventory levels are normally at their highest in the months leading up to christmas . as holiday sales typically reduce inventory levels , this reduction , combined with net income , historically provides us with strong cash flows from operations at the end of our fiscal year . for fiscal 2013 , while we increased inventory purchases in the months leading up to christmas , weaker-than-anticipated sales during the fourth quarter of fiscal 2013 resulted in higher-than-expected inventory levels and lower operating cash flows in the fourth quarter of fiscal 2013. however , healthy net sales and net income for the full fiscal year 2013 contributed sufficient levels of operating cash flows that allowed us to pay down debt balances year over year .
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although we undertake no obligation to revise or update any forward-looking statements , you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the united states securities and exchange commission ( `` sec `` ) , including annual reports on form 10-k , registration statements on form n-2 , quarterly reports on form 10-q and current reports on form 8-k. 55 overview we are a delaware corporation that was originally incorporated on june 29 , 2010 and completed our initial public offering ( `` ipo `` ) on may 19 , 2011. we are a closed-end , non-diversified management investment company that has elected to be regulated as a business development company ( `` bdc `` ) under the investment company act of 1940 , as amended ( the `` 1940 act `` ) . as such , we are obligated to comply with certain regulatory requirements . we have elected to be treated , and intend to comply with the requirements to continue to qualify annually , as a regulated investment company ( `` ric `` ) under subchapter m of the internal revenue code of 1986 , as amended ( the `` code `` ) . nmfc is also registered as an investment adviser under the investment advisers act of 1940 , as amended ( the `` advisers act `` ) . the investment adviser is a wholly-owned subsidiary of new mountain capital . new mountain capital is a firm with a track record of investing in the middle market . new mountain capital focuses on investing in defensive growth companies across its private equity , public equity and credit investment vehicles . the investment adviser manages our day-to-day operations and provides us with investment advisory and management services . new mountain finance administration , l.l.c . ( the `` administrator ” ) , a wholly-owned subsidiary of new mountain capital , provides the administrative services necessary to conduct our day-to-day operations . our wholly-owned subsidiary , new mountain finance holdings , l.l.c . ( “ nmf holdings ” or the `` predecessor operating company `` ) , is a delaware limited liability company whose assets are used to secure nmf holdings ' credit facility . nmf ancora holdings inc. ( `` nmf ancora `` ) , nmf qid ngl holdings , inc. ( “ nmf qid ” ) and nmf yp holdings inc. ( `` nmf yp `` ) , our wholly-owned subsidiaries , are structured as delaware entities that serve as tax blocker corporations which hold equity or equity-like investments in portfolio companies organized as limited liability companies ( or other forms of pass-through entities ) . we consolidate our tax blocker corporations for accounting purposes . the tax blocker corporations are not consolidated for income tax purposes and may incur income tax expense as a result of their ownership of the portfolio companies . additionally , our wholly-owned subsidiary , new mountain finance servicing , l.l.c . ( `` nmf servicing `` ) serves as the administrative agent on certain investment transactions . new mountain finance sbic l.p. ( `` sbic i `` ) and its general partner , new mountain finance sbic g.p . , l.l.c . ( `` sbic i gp `` ) , are organized in delaware as a limited partnership and limited liability company , respectively . during the year ended december 31 , 2017 , new mountain finance sbic ii , l.p. ( “ sbic ii `` ) and its general partner , new mountain finance sbic ii g.p . , l.l.c . ( “ sbic ii gp ” ) , were organized in delaware as a limited partnership and limited liability company , respectively . sbic i , sbic i gp , sbic ii and sbic ii gp are our consolidated wholly-owned direct and indirect subsidiaries . sbic i and sbic ii received licenses from the united states ( `` u.s. `` ) small business administration ( the `` sba `` ) to operate as a small business investment company ( `` sbic `` ) under section 301 ( c ) of the small business investment act of 1958 , as amended ( the `` 1958 act `` ) . our wholly-owned subsidiary , new mountain net lease corporation ( `` nmnlc `` ) , a maryland corporation , was formed to acquire commercial real properties that are subject to `` triple net `` leases and intends to qualify as a real estate investment trust , or reit , within the meaning of section 856 ( a ) of the code . our investment objective is to generate current income and capital appreciation through the sourcing and origination of debt securities at all levels of the capital structure , including first and second lien debt , notes , bonds and mezzanine securities . the first lien debt may include traditional first lien senior secured loans or unitranche loans . unitranche loans combine characteristics of traditional first lien senior secured loans as well as second lien and subordinated loans . unitranche loans will expose us to the risks associated with second lien and subordinated loans to the extent it invests in the “ last out ” tranche . in some cases , our investments may also include equity interests . our primary focus is in the debt of defensive growth companies , which are defined as generally exhibiting the following characteristics : ( i ) sustainable secular growth drivers , ( ii ) high barriers to competitive entry , ( iii ) high free cash flow after capital expenditure and working capital needs , ( iv ) high returns on assets and ( v ) niche market dominance . similar to us , sbic i 's and sbic ii 's investment objective is to generate current income and capital appreciation under our investment criteria . story_separator_special_tag in applying the income based approach as of december 31 , 2017 , we used the discount ranges set forth in the table below to value investments in our portfolio companies . the unobservable inputs used in the fair value measurement of our level iii investments as of december 31 , 2017 were as follows : replace_table_token_9_th _ ( 1 ) fair value was determined based on transaction pricing or recent acquisition or sale as the best measure of fair value with no material changes in operations of the related portfolio company since the transaction date . nmfc senior loan program i llc nmfc senior loan program i llc ( `` slp i `` ) was formed as a delaware limited liability company on may 27 , 2014 and commenced operations on june 10 , 2014. slp i is a portfolio company held by us . slp i is structured as a private investment fund , in which all of the investors are qualified purchasers , as such term is defined under the 1940 act . transfer of interests in slp i is subject to restrictions , and as a result , such interests are not readily marketable . slp i operates under a limited liability company agreement ( the `` slp i agreement `` ) and will continue in existence until june 10 , 2019 , subject to earlier termination pursuant to certain terms of the slp i agreement . the term may be extended for up to one year pursuant to certain terms of the slp i agreement . slp i had a three year re-investment period . in june 2017 , the re-investment period was extended for one additional 60 year . slp i invests in senior secured loans issued by companies within our core industry verticals . these investments are typically broadly syndicated first lien loans . slp i is capitalized with $ 93.0 million of capital commitments and $ 265.0 million of debt from a revolving credit facility and is managed by us . our capital commitment is $ 23.0 million , representing less than 25.0 % ownership , with third party investors representing the remaining capital commitments . as of december 31 , 2017 , slp i had total investments with an aggregate fair value of approximately $ 348.7 million , debt outstanding of $ 223.7 million and capital that had been called and funded of $ 93.0 million . as of december 31 , 2016 , slp i had total investments with an aggregate fair value of approximately $ 348.7 million , debt outstanding of $ 256.5 million and capital that had been called and funded of $ 93.0 million . our investment in slp i is disclosed on our consolidated schedules of investments as of december 31 , 2017 and december 31 , 2016 . we , as an investment adviser registered under the advisers act , act as the collateral manager to slp i and are entitled to receive a management fee for our investment management services provided to slp i. as a result , slp i is classified as our affiliate . no management fee is charged on our investment in slp i in connection with the administrative services provided to slp i. for the years ended december 31 , 2017 , december 31 , 2016 and december 31 , 2015 , we earned approximately $ 1.2 million , $ 1.2 million and $ 1.2 million , respectively , in management fees related to slp i , which is included in other income . as of december 31 , 2017 and december 31 , 2016 , approximately $ 0.3 million and $ 0.3 million , respectively , of management fees related to slp i was included in receivable from affiliates . for the years ended december 31 , 2017 , december 31 , 2016 and december 31 , 2015 , we earned approximately $ 3.5 million , $ 3.7 million and $ 3.6 million , respectively , of dividend income related to slp i , which is included in dividend income . as of december 31 , 2017 and december 31 , 2016 , approximately $ 0.8 million and $ 0.9 million , respectively , of dividend income related to slp i was included in interest and dividend receivable . nmfc senior loan program ii llc nmfc senior loan program ii llc ( `` slp ii `` ) was formed as a delaware limited liability company on march 9 , 2016 and commenced operations on april 12 , 2016. slp ii is structured as a private joint venture investment fund between us and skyknight income , llc ( “ skyknight ” ) and operates under a limited liability company agreement ( the `` slp ii agreement `` ) . the purpose of the joint venture is to invest primarily in senior secured loans issued by portfolio companies within our core industry verticals . these investments are typically broadly syndicated first lien loans . all investment decisions must be unanimously approved by the board of managers of slp ii , which has equal representation from us and skyknight . slp ii has a three year investment period and will continue in existence until april 12 , 2021. the term may be extended for up to one year pursuant to certain terms of the slp ii agreement . slp ii is capitalized with equity contributions which were called from its members , on a pro-rata basis based on their equity commitments , as transactions were completed . any decision by slp ii to call down on capital commitments required approval by the board of managers of slp ii . we and skyknight have committed and contributed $ 79.4 million and $ 20.6 million of equity to slp ii , respectively . our investment in slp ii is disclosed on our consolidated schedules of investments as of december 31 , 2017 and december 31 , 2016 . on april 12 , 2016 ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources the primary use of existing funds and any funds raised in the future is expected to be for repayment of indebtedness , investments in portfolio companies , cash distributions to our stockholders or for other general corporate purposes . since our ipo , and through december 31 , 2017 , we raised approximately $ 614.6 million in net proceeds from additional offerings of common stock . on april 7 , 2017 , we completed a public offering of 5,000,000 shares of our common stock at a public offering price of $ 14.60 per share . on april 13 , 2017 , in connection with the public offering , the underwriters completed a purchase of an additional 750,000 shares of our common stock with the exercise of the overallotment option to purchase up to an additional 750,000 shares of our common stock . we received total net proceeds of approximately $ 81.5 million in connection with the offering . our liquidity is generated and generally available through advances from the revolving credit facilities , from cash flows from operations , and , we expect , through periodic follow-on equity offerings . in addition , we may from time to time enter into additional debt facilities , increase the size of existing facilities or issue additional debt securities , including unsecured debt and or debt securities convertible into common stock . any such incurrence or issuance would be subject to prevailing market conditions , our liquidity requirements , contractual and regulatory restrictions and other factors . in accordance with the 74 1940 act , with certain limited exceptions , we are only allowed to borrow amounts such that our asset coverage , calculated pursuant to the 1940 act , is at least 200.0
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since our inception in 2008 , we have devoted substantially all our efforts to developing and commercializing otiprio , developing our current product candidates , and providing general and administrative support for these operations . as of december 31 , 2018 , we had cash , cash equivalents and short-term investments of $ 97.3 million . we have never been profitable , and as of december 31 , 2018 , we had an accumulated deficit of $ 415.2 million . our net losses were $ 50.4 million , $ 90.1 million and $ 110.6 million for the years ended december 31 , 2018 2017 and 2016 , respectively . substantially all our net losses have resulted from research and development expenses related to our clinical trials and product development activities , commercialization expenses to launch otiprio in the u.s. market , and other general and administrative expenses . we expect to continue to incur significant expenses and operating losses for the foreseeable future as we continue to develop , seek regulatory approval , and , if approved , commercialize our product candidates . in the near term , we anticipate our expenses will continue to be substantial as we : conduct clinical development of otividex ; conduct nonclinical and clinical development of oto-313 , oto-413 and oto-510 ; contract to manufacture our product candidates ; evaluate opportunities for development of additional product candidates ; maintain and expand our intellectual property portfolio ; hire additional staff as necessary to execute our product development plan ; and operate as a public company . we will require additional financing to complete the development of and , if approved , commercialize , otividex , oto-313 , oto-413 and any other product candidates . we believe we will continue to expend substantial resources for the foreseeable future for the development of otividex , oto-313 , oto-413 and any other product candidates we may choose to pursue . these expenditures will include costs associated with marketing and selling any products approved for sale , manufacturing , preparing regulatory submissions , and conducting nonclinical studies and clinical trials . the amount and timing of our future funding requirements will depend on many factors , including the pace and results of our clinical development efforts , the timing and nature of the regulatory approval process for our product candidates , and the revenue generated by otiprio and our other product candidates , if approved . when additional financing is required , we anticipate we will seek funding through public or private equity or debt financings or other sources , such as potential collaboration arrangements . we may not be able to raise capital on terms acceptable to us , or at all . our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies . we believe our existing cash and cash equivalents and short-term investments will be sufficient to fund our currently planned operations for a period of at least twelve months from the date of this report . in november 2008 , we entered into an exclusive license agreement with the regents of the university of california ( uc ) . under the license agreement , uc granted us an exclusive license under their rights to patents and applications that are co-developed and co-owned with us for the treatment of human otic diseases . our financial obligations under the license agreement include development and regulatory milestone payments of up to $ 2.7 million per licensed product , of which $ 1.9 million has been paid for otiprio , $ 0.8 million has been paid for otividex , and $ 0.1 million has been paid for oto-311 ( but such milestone payments are reduced by 75 % for any orphan indication product ) , and a low single-digit royalty on net sales by us or our affiliates of licensed products . in addition , for each sublicense we grant we are obligated to pay uc a fixed percentage of all royalties as well as a sliding-scale percentage of non-royalty sublicense fees received by us under such sublicense , with such percentage depending on the licensed product 's stage of development when sublicensed to such third party . we have the right to offset a certain amount of third-party royalties , milestone fees or sublicense fees against the foregoing financial obligations , provided such third-party royalties or fees are paid by us in consideration for intellectual property rights necessary to commercialize a licensed product . 64 in april 2013 , we entered into an exclusive license agreement with durect corporation ( durect ) , as part of an asset transfer agreement between us and incumed llc , an affiliate of the neurosystec corporation . under this license agreement , durect granted us an exclusive , worldwide , royalty-bearing license under durect 's rights to certain patents and applications covering our oto-313 product candidate , as well as certain related know-how . under this license agreement and the asset transfer agreement , we are obligated to make one-time milestone payments of up to $ 7.5 mil lion for the first licensed product . upon commercializing a licensed product , we are obligated to pay durect tiered , low single-digit royalties on annual net sales by us or our affiliates or sublicensees of the licensed products , and we have the right to o ffset a certain amount of third-party license fees or royalties against such royalty payments to durect . in addition , each sublicense we grant to a third party is subject to payment to durect of a low double-digit percentage of all non-royalty payments we receive under such sublicense . story_separator_special_tag 69 results of operations comparison of the years ended december 31 , 2018 and 2017 the following table sets forth the significant components of our results of operations for the years ended december 31 , 2018 and 2017 ( in thousands ) : replace_table_token_2_th product sales , net . otiprio is sold in the united states upon delivery to our network of specialty distributors who fill orders received from hospitals , ambulatory surgery centers and physician offices , who are the primary end user customers of otiprio . net product sales represent revenues for otiprio sold to our distributors during this period . product sales are recorded net of estimated chargebacks , government rebates and distributor fees . cost of product sales . cost of product sales in 2018 is less than cost of product sales in 2017 primarily due to a 2017 write-down of excess inventory of $ 1.5 million , and an impairment of otiprio manufacturing equipment of $ 0.4 million . research and development expenses . the decrease of $ 10.9 in research and development expenses resulted from decreased spending for a number of activities including : ( i ) a net $ 10.5 million decrease in otividex clinical trial and development costs due to the completion and early termination of our otividex clinical trials in 2017 , which was partially offset by an increase in clinical trial costs from the otividex phase 3 trial initiated in the third quarter of 2018 ; ( ii ) a $ 2.2 million decrease in otiprio related expenses mainly due to costs incurred in 2017 related to filing our otiprio supplemental new drug application for aoe ; ( iii ) a decrease of $ 2.6 million in other research and development costs , including professional services ; and ( iv ) a $ 1.7 million decrease in personnel costs , including stock-based compensation expense , due to a reduction in headcount . these decreases were partially offset by : ( i ) an increase of $ 4.3 million in research costs for our oto-413 hearing loss program ; and ( ii ) a $ 1.8 million increase in research costs for our oto-313 tinnitus program . selling , general and administrative expenses . the decrease of $ 26.8 million in selling , general and administrative expenses was primarily related to reduced personnel costs , including stock-based compensation expense , of approximately $ 18.1 million , resulting primarily from reductions in commercial headcount during 2017 and 2018 , and a $ 8.7 million decrease in outside services and other operating expenses for otiprio promotional support . interest income . interest income consists primarily of interest earned on our available-for-sale securities . the increase of $ 0.4 million in interest income was primarily the result of increased returns on our available-for-sale securities during 2018 compared to 2017. comparison of the years ended december 31 , 2017 and 2016 the following table sets forth the significant components of our results of operations for the years ended december 31 , 2017 and 2016 ( in thousands ) : replace_table_token_3_th 70 product sales , net . in march 2016 , we began sales of otiprio in the united states to our network of specialty distributors who fill orders received from hospitals and ambulatory surgery centers , who are the primary end user customers of otiprio for use during ttp surgery . n et product sales represent revenues for otiprio sold to our distributors during this period . product sales are recorded net of estimated chargebacks , government rebates and distributor fees . cost of product sales . cost of product sales in 2017 and 2016 is greater than net product sales primarily due to fixed costs associated with manufacturing the initial commercial lots , write-downs of excess inventory and an impairment of otiprio manufacturing equipment of $ 0.4 million in 2017. research and development expenses . the decrease of $ 18.0 million in research and development expenses was primarily due to : ( i ) a net $ 12.8 million decrease in otiprio clinical trial and development costs due to completion of our otiprio label expansion trials in aoe and aomt , the completion of our phase 3b clinical trial in pediatric patients with a history of otitis media requiring tympanostomy tubes in 2016 , and a decrease in otiprio expenses related to manufacturing , which are recorded as cost of product sales since our commercial launch of otiprio . these decreases were partially offset by an increase related to the cost of filing our otiprio supplemental new drug application for aoe ; ( ii ) a $ 7.3 million decrease in otividex clinical trial and development costs due to the completion and early termination of our otividex clinical trials in 2017 and the completion of nonclinical studies and reduced expenses related to manufacturing ; and ( iii ) a $ 1.1 million decrease in oto-311 clinical trial and development costs due to the completion of the phase 1 clinical trial in 2017 and the completion of nonclinical studies . these decreases were partially offset by : ( i ) a $ 0.3 million increase in research costs for our hearing loss programs ; ( ii ) a $ 1.9 million increase in laboratory costs and facilities expense primarily due to the lease of our new headquarters facility , which began in december 2016 ; and ( iii ) a $ 1.0 million increase in personnel costs , including stock-based compensation expense , due to additional headcount . selling , general and administrative expenses . the decrease of $ 2.9 million in selling , general and administrative expenses was primarily related to reduced personnel costs , including stock-based compensation expense , of approximately $ 4.3 million , resulting from reductions in headcount during 2017. these reduced personnel costs are net of one-time termination benefits expense . this overall decrease was partially offset by a $ 1.4 million increase in outside services and facilities expense primarily
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources we have incurred significant losses and negative cash flows from operations since our inception . as of december 31 , 2018 , we had an accumulated deficit of $ 415.2 million and we expect to continue to incur significant losses for the foreseeable future . we expect our research and development and selling , general and administrative expenses to continue to be substantial and , as a result , we may need additional capital to fund our operations , which we may obtain through one or more public or private equity or debt financings , or other sources such as potential collaboration arrangements . as of december 31 , 2018 , we had cash , cash equivalents and short-term investments of $ 97.3 million . we have principally financed our operations through sales and issuances of our equity securities , debt financing as well as private placements of redeemable convertible preferred stock and convertible notes . 71 the following table sets forth a summary of the primary sources and uses of cash for the years ended december 31 , 2018 , 201 7 and 201 6 ( in thousands ) : replace_table_token_4_th operating activities . the primary uses of cash were to fund increased levels of development activities for our product candidates and to support the commercialization of otiprio . we expect to continue the use of cash for development of our product candidates for the foreseeable future . net cash used in operating activities was $ 38.4 million in 2018 compared to $ 75.3 million in 2017. the $ 36.9 million decrease in the utilization of cash was primarily due to a decrease in operating losses compared to the prior year . net cash used in operating activities was $ 75.3 million in 2017 million compared to $ 94.3 million in 2016. the $ 19.0
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further , as a result of the decrease in electronic materials volumes , precious metals sales decreased 56.7 % from 2011 , or 58.5 % of the overall decrease in sales in 2012. across our segments , changes in product prices and mix accounted for approximately 8 % of sales decline , lower sales volumes reduced sales by approximately 8 % and changes in foreign currency exchange rates reduced sales an additional 2 % . gross profit gross profit decreased 27.7 % in 2012 to $ 297.9 million , compared with $ 412.2 million in 2011. the most significant driver was the performance of the electronic materials segment , which accounted for approximately 80 % of the total decline . weakness in europe also contributed to the reduction in gross profit , particularly in the color and glass performance materials , performance coatings and polymer additives segments . gross profit percentage declined to 16.8 % of net sales from 19.1 % of net sales in 2011. selling , general and administrative expense selling , general and administrative ( sg & a ) expenses were $ 302.7 million in 2012 and $ 335.3 million in 2011 , $ 32.7 million lower in 2012 compared with 2011 ; however , as a percentage of net sales , sg & a expenses increased 1.5 % to 17.1 % in 2012 , compared with 15.6 % in 2011. the most significant driver of the decline in sg & a expenses in 2012 was the change in accounting principle that was elected during the third quarter of 2012 , under which we now recognize actuarial gains and losses on our defined benefit pension and other postretirement benefit plans in the year in which the gains or losses occur . also contributing to the reduction from 2011 were favorable foreign currency exchange impacts , reduced depreciation and amortization expense , and lower stock-based compensation expense driven by certain personnel actions during the year . partially offsetting the favorability were increased severance costs , higher bad debt expense , and increased costs related to an initiative to streamline and standardize business processes and improve management information systems tools . the following represent the components with significant changes between 2012 and 2011 : replace_table_token_5_th nm not meaningful restructuring and impairment charges replace_table_token_6_th nm not meaningful 22 restructuring and impairment charges increased significantly in 2012 compared with 2011. the primary driver of the impairment charges taken against goodwill and property , plant and equipment in the current year was the decline in profitability of our solar pastes business and the related impact on the forecast for electronic materials . in addition to the impacts related to electronic materials , we continued to aggressively liquidate our portfolio of real estate related to idled facilities that is classified as held for sale , which drove incremental impairment charges during the year . our idled facilities are principally located in europe , which continued to experience difficult economic conditions . idled assets in france , the netherlands and the u.s. were sold in 2012. the restructuring charges incurred in 2012 primarily related to our performance coatings business in europe and the disposal of the leased corporate aircraft . interest expense interest expense in 2012 did not change significantly from 2011. the components of interest expense are as follows : replace_table_token_7_th income tax expense in 2012 , income tax expense was $ 109.5 million , while in the prior year , we recorded income tax expense of $ 19.3 million . the current year tax expense was driven by a $ 182.7 million charge to increase the valuation allowances to more accurately measure the portion of the deferred tax assets that more likely than not will be realized , a $ 4.1 million charge related to the expiration of certain tax credits , and the tax impact of the goodwill impairment . the prior year expense was also affected by an $ 11.3 million charge to increase the valuation allowances related to deferred tax assets . comparison of the years ended december 31 , 2011 and 2010 for the year ended december 31 , 2011 , ferro net income was $ 5.1 million , compared with net income of $ 15.4 million in 2010. for the year ended december 31 , 2011 , ferro net income attributable to common shareholders was $ 4.2 million , or $ 0.05 per share , reflecting $ 0.2 million of preferred stock dividends , compared with ferro net income attributable to common shareholders of $ 13.2 million , or $ 0.15 per share , reflecting $ 0.7 million of preferred stock dividends , in 2010. net sales replace_table_token_8_th 23 net sales increased by 2.6 % in the year ended december 31 , 2011 , compared with the prior year . changes in product prices and mix , together with changes in foreign currency exchange rates , were the primary drivers of the increased sales . increased sales of precious metals , driven by higher prices for silver , also contributed to the overall sales growth . lower sales volume had a negative effect on sales , particularly in the electronic materials segment . the lower sales volume also was the result of decisions we made in 2010 to exit certain markets served by the color and glass performance materials and electronic materials segments . for the year , changes in product prices and mix accounted for approximately 10 % of sales growth , and changes in foreign currency exchange rates contributed an additional 2 % to higher sales . lower sales volume reduced sales by approximately 9 % . higher precious metal prices contributed approximately 1 % to the overall sales increase during the year , including effects from changes in volume and prices of the precious metals . gross profit gross profit declined during 2011 primarily as a result of reduced sales volume of conductive pastes used in solar cell applications . story_separator_special_tag cash flows from operating activities decreased $ 145.6 million from 2010 to 2011. cash flows declined $ 68.0 million from decreases in accrued expenses , primarily from the payment of 2010 year-end incentive compensation . the return of precious metal deposits provided $ 28.1 million in 2011 and $ 84.3 million in 2010 due to additional credit lines not requiring collateral . adjustments to reconcile net income to cash provided by operating activities include noncash losses on extinguishment of debt , depreciation and amortization , and deferred income taxes , as well as payments toward retirement benefits greater than the expenses recognized . the net positive effects of adjustments for these items declined by $ 27.8 million from 2010 to 2011. partially offsetting these decreases was an improvement of $ 10.3 million in net income as a result of reduced restructuring and impairment charges , reduced losses on extinguishment of debt and lower interest expense . investing activities . capital expenditures decreased $ 14.0 million from 2011 to 2012 and increased $ 28.0 million from 2010 to 2011. in 2010 , we continued capital spending on manufacturing rationalization programs , but we made a concerted effort to defer or scale back new projects in order to conserve cash during a period of reduced customer demand associated with the global economic downturn . in 2011 , our capital spending increased to support a higher level of business activity and also included certain deferred projects . in 2012 , we again deferred or scaled back new projects in response to another period of reduced customer demand . in 2012 , we received proceeds of $ 3.0 million from the sale of assets , primarily property , plant and equipment in toccoa , georgia ; uden , netherlands ; and limoges , france . in 2011 , we received proceeds of $ 6.4 million from the sale of assets , primarily property , plant and equipment in australia and our former corporate headquarters in cleveland , ohio . in 2010 , we received proceeds of $ 11.4 million from the sale of assets and businesses , primarily property , plant and equipment in the netherlands and our business operations in precious metal preparations in asia . financing activities . in 2011 , we entered into several international programs to sell with recourse trade accounts receivable to financial institutions . advances under these programs are accounted for as borrowings 31 secured by the receivables . we also redeemed in cash all outstanding series a preferred stock for $ 9.4 million . in 2010 , we entered into a $ 350.0 million multi-currency senior revolving credit facility , maturing in 2015. we also issued $ 250.0 million of 7.875 % senior notes in a high yield bond offering , repurchased $ 136.7 million of our 6.50 % convertible senior notes through a tender offer and subsequent market purchases , and repaid all outstanding term loans totaling $ 231.4 million and our revolving credit line of a net $ 1.7 million associated with the 2009 amended and restated credit facility . we had net proceeds from all credit facilities of $ 34.8 million in 2012 and $ 15.6 million in 2011 , for a net increase in 2012 of $ 19.2 million in our rate of borrowing . in 2010 , we had net repayments of $ 144.3 million , for a net increase in 2011 of $ 159.9 million in our rate of borrowing . in 2010 , we paid $ 5.7 million to issue the 7.875 % senior notes and $ 4.1 million to enter into our 2010 credit facility . we have paid no dividends on our common stock since 2009. dividends paid on our preferred stock totaled $ 0.2 million in 2011 and $ 0.7 million in 2010. story_separator_special_tag href= `` https : //www.sec.gov/archives/edgar/data/0000035214/000119312513090626/ # toc `` > financing activities . the purchasers have no recourse to ferro 's other assets for failure of payment of the receivables as a result of the lack of creditworthiness , or financial inability to pay , of the related obligor . in may 2012 , we extended the maturity of this credit facility through may 2013. at december 31 , 2012 , we had borrowed $ 40.0 million under this facility . after reductions for non-qualifying receivables , we had $ 9.0 million of additional borrowings available under the program at december 31 , 2012. at december 31 , 2012 , the interest rate was 0.6 % . international receivable sales programs we have several international programs to sell with recourse trade accounts receivable to financial institutions . advances received under these programs are accounted for as borrowings secured by the receivables and included in net cash provided by financing activities . at december 31 , 2012 , the commitments supporting these programs totaled $ 18.5 million , the advances received of $ 6.1 million were secured by $ 9.3 million of accounts receivable , and no additional borrowings were available under the programs . the interest rates under these programs are based on euribor rates plus 1.75 % . at december 31 , 2012 , the weighted-average interest rate was 1.9 % . off balance sheet arrangements consignment and customer arrangements for precious metals . we use precious metals , primarily silver , in the production of some of our products . we obtain most precious metals from financial institutions under consignment agreements ( generally referred to as our precious metals consignment program ) . the financial institutions retain ownership of the precious metals and charge us fees based on the amounts we consign and the period of consignment . these fees were $ 6.5 million for 2012. at december 31 , 2012 , we had on hand precious metals owned by participants in our precious metals consignment program of $ 112.2 million , measured at fair value based on market prices for identical assets and net of credits . we also process precious
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | capital resources and liquidity major debt instruments that were outstanding during 2012 are described below . 7.875 % senior notes in 2010 , we issued $ 250 million of 7.875 % senior notes due 2018 ( the senior notes ) . we used portions of the proceeds from the offering to repay all of the remaining term loans and revolving borrowings outstanding under a credit facility originally entered into in 2006 and as amended and restated through november 2009 ( the 2009 amended and restated credit facility ) . we also used portions of the proceeds from the offering to repurchase the 6.50 % convertible senior notes that were tendered pursuant to a related tender offer . the senior notes were issued at par and bear interest at a rate of 7.875 % per year , payable semi-annually in arrears on february 15 and august 15 of each year . the senior notes mature on august 15 , 2018 , and are unsecured . the principal amount outstanding was $ 250.0 million at december 31 , 2012. at december 31 , 2012 , we were in compliance with the covenants under the senior notes ' indenture . 6.50 % convertible senior notes in 2008 , ferro issued $ 172.5 million of 6.50 % convertible senior notes due 2013 ( the convertible notes ) . the convertible notes bear interest at a rate of 6.5 % per year , payable semi-annually in arrears on february 15 and august 15 of each year . the convertible notes mature on august 15 , 2013. in 2010 , we purchased $ 136.7 million of the convertible notes through a tender offer or on the open market . in 2011 , we purchased an additional $ 0.7 million of the convertible notes on the open market . in connection with these transactions , we recognized losses on extinguishment of debt of $ 13.1 million in 2010 and less than $ 0.1 million in 2011 , consisting of unamortized debt issuance costs and the difference between the carrying value and the fair value of these notes .
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costs incurred prior to , or in connection with , the business combination . these corporate costs are considered discrete costs in 2017. secured long-term financing that positions us well relative to other us modular space competitors to pursue organic and inorganic growth opportunities , such as the acquisition of acton mobile . 41 business environment and outlook our customers operate in a diversified set of end markets , including commercial and industrial , construction , education , energy and natural resources , government and other end-markets . we track several market leading indicators including those related to our two largest end markets , the commercial and industrial segment and the construction segment , which collectively accounted for nearly 80 % of our revenues in the year ended december 31 , 2017 . market fundamentals underlying these markets are currently favorable , and we expect continued modest market growth in the next several years . current events , such as tax reform , discussions of increased infrastructure spending , and rebuilding in areas impacted by natural disasters in 2017 across the united states also provide us confidence in continued demand for our products . although only 12.0 % of our revenues for the year ended december 31 , 2017 were from the modular - other north america segment , markets in canada , including alaska , and mexico , appear to have stabilized from the declines experienced over the last several years related to the energy markets . however , competitive pressures in these markets may continue to depress pricing given current levels of supply in the market until utilization across the industry improves . tax reform impact on business outlook on december 22 , 2017 , the us government enacted comprehensive tax legislation , commonly referred to as the tax cuts and jobs act ( “ tax act ” ) . the tax act makes broad and complex changes to the us tax code which impact our year ended december 31 , 2017 including , but not limited to , reducing the corporate tax rate from 35 % to 21 % , requiring a one-time transition tax ( the “ transition tax ” ) on certain unrepatriated earnings of foreign subsidiaries that may be electively paid over eight years , changes to the interest deductibility under 163 ( j ) and accelerating first year expensing of certain capital expenditures . the tax act also introduces new tax laws that may impact our taxable income beginning in 2018 which will include , but is not limited to , generally eliminating us federal income taxes on foreign earnings ( subject to certain important exceptions ) , a new provision designed to tax currently global intangible low taxed income ( “ gilti ” ) , a provision that could limit the amount of deductible interest expense , limitations on the deductibility of certain executive compensation , creating a base erosion anti-abuse tax ( “ beat ” ) , and modifying or repealing many deductions and credits . shortly after the tax act was enacted , the sec staff issued staff accounting bulletin no . 118 , income tax accounting implications of the tax cuts and jobs act ( “ sab 118 ” ) which provides guidance on accounting for the tax act 's impact . sab 118 provides a measurement period , which in no case should extend beyond one year from the tax act enactment date , during which a company acting in good faith may complete the accounting for the impacts of the tax act under accounting standards codification ( “ asc ” ) topic 740. per sab 118 , we must reflect the income tax effects of the tax act in the reporting period in which the accounting under asc topic 740 is complete . to the extent our accounting for certain income tax effects of the tax act is incomplete , we can determine a reasonable estimate for those effects and record a provisional estimate in the financial statements in the first reporting period in which a reasonable estimate can be determined . if we can not determine a provisional estimate to be included in the financial statements , we should continue to apply asc 740 based on the provisions of the tax laws that were in effect immediately prior to the tax act being enacted . if we are unable to provide a reasonable estimate of the impacts of the tax act in a reporting period , a provisional amount must be recorded in the first reporting period in which a reasonable estimate can be determined . our year end income tax provision includes $ 27.4 million of net additional income tax expense during the quarter ended december 31 , 2017 , driven by the reduction in the u.s. corporate tax rate , recordation of a valuation allowance on 163 ( j ) and the transition tax on foreign earnings . reduction in u.s. corporate tax rate the tax provision includes a tax benefit of $ 28.1 million for the remeasurement of certain deferred tax assets and liabilities to reflect the corporate tax rate reduction impact to our net deferred tax balances . transition tax on foreign earnings the transition tax is a tax on the previously untaxed accumulated and current earnings and profits of certain of our foreign subsidiaries . in order to determine the amount of the transition tax , we must determine , in addition to other factors , the amount of post-1986 earnings and profits ( “ e & p ” ) of the relevant subsidiaries , as well as the amount of non-us income taxes paid on such earnings . e & p is similar to retained earnings of the subsidiary , but requires other adjustments to conform to us tax rules . story_separator_special_tag other expense , net : other expense , net was $ 2.8 million for the year ended december 31 , 2017 and $ 1.8 million for the year ended december 31 , 2016 due to an increase in financing related costs . interest expense : interest expense increased $ 24.6 million , or 26.0 % , to $ 119.3 million for the year ended december 31 , 2017 from $ 94.7 million for the year ended december 31 , 2016 . upon consummation of the business combination in november of 2017 , we issued $ 300.0 million of notes and entered into a new $ 600.0 million abl facility to fund our operations as a stand-alone company . the majority of the interest costs incurred during the year ended december 31 , 2017 relate to the previous debt 47 structure of the company as part of the algeco group or to fees associated to establishing the new debt structure . the increase in interest expense is driven by the following items : ( a ) $ 7.5 million write-off of deferred issuance costs pertaining to the modification of the abl facility and the settlement of the notes due to affiliates , ( b ) a $ 5.6 million increase in interest expense on the algeco group revolver facility ( see note 11 ) as the first quarter amendment to the facility increased the base portion of the variable interest rate , ( c ) $ 3.8 million in bridge financing fees incurred in connection with the business combination , ( d ) a increase of $ 3.5 million in amortization of deferred issuance and discount costs driven by higher deferred issuance and discount costs in 2017 , ( e ) $ 2.1 million of interest expense incurred under the notes issued in november 2017 and , ( f ) $ 2.0 million of higher interest expense pertained to other financing obligations . see note 11 to the consolidated financial statements for further discussion of our debt . interest income : interest income increased $ 2.0 million , or 19.6 % , to $ 12.2 million for the year ended december 31 , 2017 from $ 10.2 million for the year ended december 31 , 2016 . this increase is primarily due to an increase in the principal balance of notes due from affiliates . income tax expense ( benefit ) : income tax benefit decreased $ 23.6 million to $ 0.9 million for the year ended december 31 , 2017 compared to $ 24.5 million for the year ended december 31 , 2016 . the decrease in income tax benefit was principally due to the impairment of canadian goodwill , as well as the impacts of the tax act enacted by the us government on december 22 , 2017 , which reduced the federal income tax rate from 35 % to 21 % effective january 1 , 2018 , and requires mandatory repatriation of foreign earnings . the canadian goodwill , which had no tax basis , was recorded as an unfavorable permanent adjustment which reduces the benefit expected based on the pre-tax loss . as a result of the tax act , we remeasured our net deferred tax liabilities and recognized a net tax benefit of $ 28.1 million . in addition , we recorded tax expense of $ 50.5 million related to valuation allowances related to limitations on the deductibility of high-interest debt as a result of the change in ownership and control related to the business combination . had it not been for these changes , income tax expense would have increased driven by the increase in loss from continuing operations for the year ended december 31 , 2017. comparison of years ended december 31 , 2016 and 2015 revenue : total revenue decreased $ 26.7 million , or 5.9 % , to $ 426.6 million for the year ended december 31 , 2016 from $ 453.3 million for the year ended december 31 , 2015 . the decrease was primarily the result of a 38.9 % decline in total revenue in the modular - other north america business segment , attributable to reduced demand from the upstream oil and gas sector offset by an increase in modular leasing revenue and modular delivery and installation revenue in the us . total average modular units and portable storage units on rent for 2016 and 2015 were 54,582 and 56,524 , respectively . the decrease was mainly due to declines in the modular - other north america business segment related to reduced demand from the upstream oil and gas sector due to lower customer spending on the construction and development of new projects due to current oil prices , and the completion of existing contracts and projects . the average modular utilization rate during 2016 was 70.9 % , as compared to 71.6 % during 2015. the decrease in average modular utilization rate was driven by declines in the modular - other north america business segment . gross profit : our gross profit percentage was 39.4 % and 35.9 % for the years ended december 31 , 2016 and 2015 , respectively . our gross profit percentage , excluding the effects of depreciation , was 55.6 % and 53.3 % for the years ended december 31 , 2016 and 2015 , respectively . gross profit increased $ 5.3 million , or 3.3 % , to $ 168.2 million for the year ended december 31 , 2016 from $ 162.9 million for the year ended december 31 , 2015 . the increase in gross profit and gross profit percentage was driven in part by a discrete transaction which contributed approximately $ 3.0 million to gross profit for the year ended december 31 , 2016 and also by an $ 9.5 million reduction in depreciation of rental equipment for the year ended december 31 , 2016. sg & a : sg & a expense decreased $ 0.3 million , or 0.2
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows from operating activities cash used by operating activities for the year ended december 31 , 2017 was $ 1.4 million as compared to cash provided by operating activities of $ 58.7 million for year ended december 31 , 2016 , a decrease of $ 60.1 million . the reduction in cash provided by operating activities was predominantly due to higher discrete expenses incurred in connection with the business combination , abl facility , and the notes , and lower gross profit on our continuing and discontinued business operations . cash provided by operating activities for the year ended december 31 , 2016 was $ 58.7 million as compared to $ 119.9 million for year ended december 31 , 2015 , a decrease of $ 61.2 million . the reduction in cash provided by operating activities was predominantly due to higher net loss , driven by lower revenue and gross profit associated with our continuing and discontinued business operations . additionally , we had negative working capital impacts to accounts payable as a result of rental equipment investments that were made in 2015 and subsequently paid in 2016. cash flows from investing activities cash used in investing activities for the year ended december 31 , 2017 was $ 392.7 million as compared to $ 30.2 million for the year ended december 31 , 2016 , an increase of$ 362.5 million .
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key operational and cost measures of the transformation plan include : ( i ) the investment in capital improvements in our stores and wholesale locations to drive comparable sales improvement ; ( ii ) the optimization and streamlining of our organizational model as well as the closure of underperforming stores in north america , and select international stores ; ( iii ) the realignment of inventory levels and mix to reflect our elevated product strategy and consumer preferences ; ( iv ) the investment of approximately $ 50 million in incremental advertising costs to elevate consumer perception of our coach brand , drives sales growth and promote our new strategy , which started in fiscal 2015 ; and ( v ) the significant scale-back of our promotional cadence in an increased global promotional environment , particularly within our outlet internet sales site , which began in fiscal 2014. the company 's execution of these key operational and cost measures were on plan through the end of fiscal 2015 , and we believe that long-term 29 growth can be realized through these transformational efforts over time . for further discussion of charges incurred in connection with the transformation plan , see `` items affecting comparability , `` herein . furthermore , as discussed in note 7 , `` acquisitions , `` the company acquired luxury designer footwear brand stuart weitzman , which we believe will complement our current leadership position in premium handbags and accessories , while immediately adding to the company 's earnings as we continue to make meaningful progress towards our brand transformation . the acquisition was consummated on may 4 , 2015 , and the brand contributed $ 43.0 million in net sales in fiscal 2015 , included within our other segment . current trends and outlook in addition to the risks surrounding the successful execution of our transformation plan initiatives , our outlook reflects a certain level of uncertainty surrounding the global economy . the global economic environment continues to have an impact on consumer confidence , which in turn influences the level of spending on discretionary items . global consumer retail traffic remained relatively weak and inconsistent , which has led to a more promotional environment in the fragmented retail industry due to increased competition and a desire to offset traffic declines with increased levels of conversion . macroeconomic and geopolitical events in greater china and southeast asia have contributed to volatility in consumer spending within the region . furthermore , it is still too early to understand the impact , if any , of mers ( middle east respiratory syndrome ) on consumer spending in asia , including the impact on tourism in the region . within the u.s. , a prolonged and tough winter season impacted demand during the first half of calendar 2015 , however certain limited and recent factors within the u.s. , including an improvement in the labor market and modest growth in overall consumer spending , suggest a potential moderate strengthening in the u.s. economic outlook . it is still , however , too early to understand what kind of sustained impact this will have on consumer discretionary spending . if the global macroeconomic environment remains volatile or worsens , the constrained level of worldwide consumer spending and modified consumption behavior may continue to have a negative effect on our outlook . we will continue to monitor these risks and trends and evaluate and adjust our operating strategies and cost management opportunities to mitigate the related impact on our results of operations , while remaining focused on the long-term growth of our business and protecting the value of our brands . as discussed in part i , item 1 - `` business `` and as part of our transformation plan as described in note 3 , `` transformation and other actions , `` in fiscal 2015 , we have reduced the number of retail stores and total square footage within north america , as we continue to optimize our real estate position . we expect this trend to continue in the next fiscal year with the anticipated closure of approximately 15-20 north america retail stores in fiscal 2016 , attributable to our transformation plan . we expect to continue to see modest to no growth in north america outlet store square footage as we continue to optimize our real estate position across channels by expanding our most productive stores to accommodate a broader expression of lifestyle assortment while continuing to assess opportunities to close under-performing stores . within our international segment , we are expecting to reflect modest growth in our store count over the next few years , particularly within mainland china and europe . lastly , within stuart weitzman , we are expecting modest growth in our real estate position over the next year . for a detailed discussion of significant risk factors that have the potential to cause our actual results to differ materially from our expectations , see part i , item 1a - `` risk factors `` included in this annual report on form 10-k. 30 summary — fiscal 2015 in fiscal 2015 , coach , inc. reported net sales of $ 4.19 billion ( including $ 43.0 million attributable to the stuart weitzman brand ) , net income of $ 402.4 million and net income per diluted share of $ 1.45 . this compares to net sales of $ 4.81 billion , net income of $ 781.3 million , and net income per diluted share of $ 2.79 in fiscal 2014 . in fiscal 2015 , the comparability of our operating results has been affected by $ 145.9 million of pretax charges ( $ 107.8 million after tax , or $ 0.39 per diluted share ) related to our transformation plan , $ 24.6 million of pretax charges ( $ 21.0 million after tax , or $ 0.08 per diluted share ) related to acquisition charges associated with the stuart weitzman brand . story_separator_special_tag the following table presents operating income by reportable segment for fiscal 2015 compared to fiscal 2014 : replace_table_token_14_th ( 1 ) operating income in the other category consists of sales and expenses in coach brand ancillary channels in fiscal 2015 , including licensing and disposition , and sales and expenses generated by the stuart weitzman brand during the final two months of fiscal 2015. north america operating income decreased 29.5 % or $ 343.6 million to $ 820.5 million in fiscal 2015 reflecting the decrease in gross profit of $ 418.1 million which was partially offset by lower sg & a expenses of $ 74.5 million . the decrease in sg & a expenses was due to lower variable selling costs as a result of lower sales in our stores and internet business . operating margin decreased 420 basis points to 33.3 % in fiscal 2015 from 37.5 % during the same period in the prior year due to higher sg & a expense as a percentage of net sales of 390 basis points , primarily due to deleveraging of selling expenses as net sales have declined , and lower gross margin of 50 basis points . international operating income decreased 13.5 % or $ 75.1 million to $ 480.6 million in fiscal 2015 , primarily reflecting a decrease in gross profit of $ 46.5 million as well as higher sg & a expenses of $ 28.6 million . the increase in sg & a expenses is related to a $ 30.8 million increase in greater china and asia , excluding japan , related to new store openings and a $ 24.9 million increase in europe to support growth in the business . the increase in sg & a costs were partially offset by foreign currency effects in japan of $ 32.2 million . operating margin decreased 420 basis points to 29.6 % in fiscal 2015 from 33.8 % during the same period in the prior year primarily due to higher overall sg & a as a percentage of net sales which increased by 240 basis points and lower gross margin of 180 basis points . corporate unallocated operating expense increased $ 74.7 million to $ 708.6 million in fiscal 2015 , an increase of 11.8 % . this increase was primarily attributable to higher charges incurred by the company in fiscal 2015 as part of its transformation plan . excluding items affecting comparability , unallocated operating expenses increased by 8.9 % or $ 44.6 million to $ 547.0 million from $ 502.4 million . this increase is primarily due to higher incentive compensation costs and additional costs incurred particularly related to information technology . 35 provision for income taxes the effective tax rate was 34.2 % in fiscal 2015 , as compared to 30.4 % in fiscal 2014. excluding the items affecting comparability , the effective tax rate was 32.1 % in fiscal 2015 , as compared to 30.6 % in fiscal 2014. the increase in our effective tax rate was primarily attributable to the loss of certain foreign tax benefits that expired at the end of fiscal 2014 , as well as the acquisition-related impact attributable to stuart weitzman . we expect our rate to be lower in fiscal 2016 primarily attributable to the geographic mix of earnings , the expiration of certain statutes , the settlement of audits and the ongoing benefit of available foreign tax credits . net income net income decreased 48.5 % or $ 378.9 million to $ 402.4 million in fiscal 2015 as compared to $ 781.3 million in fiscal 2014 . excluding items of comparability , net income decreased 38.9 % or $ 338.4 million to $ 531.2 million in fiscal 2015 from $ 869.6 million in fiscal 2014 . this decrease was primarily due to lower operating income partially offset by lower provision for income taxes . earnings per share net income per diluted share decreased 47.9 % to $ 1.45 in fiscal 2015 as compared to $ 2.79 in fiscal 2014 . excluding items of comparability , net income per diluted share decreased 38.2 % or $ 1.18 to $ 1.92 in fiscal 2015 from $ 3.10 in fiscal 2014 , due to lower net income . fiscal 2014 compared to fiscal 2013 the following table summarizes results of operations for fiscal 2014 compared to fiscal 2013 . all percentages shown in the table below and the discussion that follows have been calculated using unrounded numbers . replace_table_token_15_th items affecting comparability the company 's reported results are presented in accordance with gaap . the reported gross profit , sg & a expenses , operating income , income before provision for income taxes , provision for income taxes , net income and earnings per diluted share in fiscal 2014 and 2013 reflect certain items which affect the comparability of our results , as noted in the following reconciliation tables . refer to page 41 for a discussion on the non-gaap measures . 36 coach , inc. gaap to non-gaap reconciliation for the years ended june 28 , 2014 and june 29 , 2013 ( in millions , except per share data ) replace_table_token_16_th replace_table_token_17_th items affecting comparability fiscal 2014 items in fiscal 2014 , the company incurred restructuring and transformation related charges of $ 131.5 million under its transformation plan announced in the fourth quarter of fiscal 2014. the charges recorded in cost of sales and sg & a expenses were $ 82.2 million and $ 49.3 million , respectively . these charges , which are primarily associated with our north america business , relate to inventory and fleet related costs , including impairment , accelerated depreciation and severance related to store closures . fiscal 2013 items in fiscal 2013 , the company incurred restructuring and transformation related charges of $ 53.2 million . the charges recorded in selling , general and administrative expenses and cost of sales were $ 48.4 million and $ 4.8 million , respectively . the charges
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | net cash provided by operating activities decreased $ 48.0 million primarily due to lower net income of $ 378.9 million from fiscal 2014 to fiscal 2015 , partially offset by changes in our operating asset and liability balances of $ 331.4 million . changes in our operating asset and liability balances were primarily driven by changes in accounts payable , inventory , other balance sheet changes and accrued liabilities . accounts payable were a source of cash of $ 64.4 million in fiscal 2015 , driven primarily by the timing of inventory purchases and lease termination payments , as compared to a use of cash of $ 30.2 million in fiscal 2014. inventory was a source of cash of $ 29.2 million in fiscal 2015 , primarily driven by overall lower inventory purchases in fiscal 2015 , as compared to a use of cash of $ 64.1 million in fiscal 2014. other balance sheet changes , net , which primarily relate to other assets , were a source of cash of $ 17.8 million in fiscal 2015 as compared to a use of cash of $ 64.2 million in fiscal 2014 , primarily due to a decrease in tax receivables and changes in deferred tax accounts . accrued liabilities were a source of cash 41 of $ 63.2 million in fiscal 2015 , primarily driven by increased payroll and incentive compensation accruals , as compared to source of cash of $ 14.1 million in fiscal 2014. net cash used in investing activities net cash used in investing activities was $ 612.9 million in fiscal 2015 compared to $ 707.7 million in fiscal 2014 .
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defense business is buoyed by the relevance of our programs to the military 's funding priorities , the diversity of our programs and customers within the budget , our insight into customer requirements stemming from our incumbency on core programs , our ability to evolve our products to address a fast-changing threat environment and our proven track record of successful contract execution . we continue to pursue opportunities presented by international demand for military equipment and information technologies from our indigenous international operations and through exports from our u.s. businesses . while the revenue potential can be significant , international defense budgets , much like u.s. budgets , are subject to unpredictable issues of contract award timing , changing priorities and overall spending pressures . as a result of the demonstrated success of our products and services , we would expect our international sales and exports to grow subject to overall economic conditions . in our aerospace group , business-jet market conditions were steady in 2012. the group benefited from robust flying hours across the installed base of gulfstream aircraft , improved large-cabin order interest from north american corporate customers and lower customer contract defaults . we expect our continued investment in new aircraft products to support aerospace 's long-term growth , as evidenced by the group 's newest aircraft offerings , the g280 and the g650 . similarly , we believe that aircraft-service revenues provide the group diversified exposure to aftermarket sales fueled by continued growth in the global installed business-jet fleet . results of operations introduction an understanding of our accounting practices is important to an evaluation of our operating results . we recognize the majority of our revenues using the percentage-of-completion method of accounting . the following paragraphs explain how this method is applied in recognizing revenues and operating costs in our aerospace and defense business groups . in the aerospace group , contracts for new aircraft have two major phases : the manufacture of the “ green ” aircraft and the aircraft 's outfitting , which includes exterior painting and installation of customer-selected interiors . we record revenues on these contracts at the completion of these two phases : when green aircraft are delivered to and accepted by the customer , and when the customer accepts final delivery of the outfitted aircraft . revenues in the aerospace group 's other original equipment manufacturers ( oems ) completions and services businesses are recognized as work progresses or upon delivery of services . changes in revenues result from the number and mix of new aircraft deliveries ( green and outfitted ) , progress on aircraft completions and the level of aircraft service activity during the period . the majority of the aerospace group 's operating costs relates to new aircraft production for firm orders and consists of labor , material and overhead costs . the costs are accumulated in production lots and recognized as operating costs at green aircraft delivery based on the estimated average unit cost in a production lot . while changes in the estimated average unit cost for a production lot impact the level of operating costs , the amount of operating costs reported in a given period is based largely on the number and type of aircraft delivered . operating costs in the aerospace group 's completions and services businesses are generally recognized as incurred . 27 for new aircraft , operating earnings and margins are a function of the prices of our aircraft , our operational efficiency in manufacturing and outfitting the aircraft and the mix of aircraft deliveries between the higher-margin large-cabin and lower-margin mid-cabin aircraft . additional factors affecting the group 's earnings and margins include the volume , mix and profitability of completions and services work performed , the market for pre-owned aircraft and the level of general and administrative ( g & a ) and net research and development ( r & d ) costs incurred by the group . in the defense groups , revenue on long-term government contracts is recognized as work progresses , either as products are produced or services are rendered . as a result , changes in revenues are discussed generally in terms of volume , typically measured by the level of activity on individual contracts or programs . year-over-year variances attributed to volume are due to changes in production or service levels and delivery schedules . operating costs for the defense groups consist of labor , material , subcontractor and overhead costs and are generally recognized as incurred . variances in costs recognized from period to period primarily reflect increases and decreases in production or activity levels on individual contracts and , therefore , result largely from the same factors that drive variances in revenues . operating earnings and margins in the defense groups are driven by changes in volume , performance or contract mix . performance refers to changes in profitability based on revisions to estimates at completion on individual contracts . these revisions may result from increases or decreases to the estimated value of the contract , the estimated costs to complete or both . therefore , changes in costs incurred in the period do not necessarily impact profitability . it is only when total estimated costs at completion change that profitability may be impacted . contract mix refers to changes in the volume of higher- vs. lower-margin work . higher or lower margins can be inherent in the contract type ( e.g . , fixed-price/cost-reimbursable ) or type of work ( e.g . , development/production ) . 28 consolidated overview replace_table_token_9_th review of 2011 vs. 2012 replace_table_token_10_th our revenues decreased in 2012 compared with 2011. revenues decreased in the information systems and technology 's mobile communication systems business and on several international wheeled vehicle contracts in the combat systems group . these decreases were partially offset by higher revenues in the aerospace group due to increased deliveries of g650 aircraft . story_separator_special_tag 2013 outlook we expect the marine systems group 's 2013 revenues to increase approximately 2 percent from 2012 . with the completion of the t-ake program , operating margins are expected to decline to the low- to mid- 9 percent range in 2013 . our 2013 outlook assumes the u.s. government operates under a cr in fy 2013 and there are no significant reductions to the proposed defense budget . information systems and technology review of 2011 vs. 2012 replace_table_token_23_th operating results the information systems and technology group 's revenues decreased in 2012 compared with 2011 . the decrease consisted of the following : mobile communication systems $ ( 1,086 ) information technology ( it ) solutions and mission support services ( 56 ) intelligence , surveillance and reconnaissance ( isr ) systems ( 62 ) total decrease $ ( 1,204 ) the decrease in revenues in the mobile communication systems business was driven by slowed defense spending , protracted u.s. customer acquisition cycles and a slower than expected transition to follow-on work on several contracts . this resulted in lower revenues in 2012 on key programs , including the warfighter information network – tactical ( win-t ) and common hardware systems ( chs ) , and for encryption and ruggedized hardware products . in addition , over 10 percent of the decline in the group 's revenues was due to lower volume on the u.k.-based bowman communications system program , which has been successfully fielded and has now moved into maintenance and long-term support . in the group 's it solutions and services business , decreased volume in 2012 due to the completion of several large-scale it infrastructure and support programs for the intelligence community and the dod , 37 including the new campus east , mark center and walter reed national military medical center programs , was largely offset by revenues from the 2011 acquisition of vangent , inc. revenues were down in 2012 compared with 2011 in the group 's isr business primarily due to lower optical products revenues as demand was impacted negatively by pressured defense budgets and the broader economic environment . actions taken in 2012 to align the business with anticipated future demand are expected to stabilize performance in 2013. operating earnings and margins decreased significantly in 2012 compared with 2011 . this decrease was driven by the negative impact of four discrete charges : $ 2 billion goodwill impairment resulting from a decline in the estimated fair value of the group caused by topline pressure from slowed defense spending and the threat of sequestration , and margin compression due to mix shift impacting the projected cash flows of the group ; $ 110 of intangible asset impairments on several assets in our optical products business , most significantly the contract and program intangible asset , as a result of competitive losses and delays in the fourth quarter of 2012 indicative of lower overall demand caused by the economic downturn ; $ 58 write-down of substantially all of the remaining ruggedized hardware inventory , including $ 25 in the third quarter , based on anticipated remaining demand for products that ceased production in 2012 ; and $ 26 for cost growth associated with the demonstration phase of the sv program ( an additional $ 6 was recorded by the combat systems group 's european military vehicles business ) . for further discussion of the impairment charges , see note b to the consolidated financial statements and the application of critical accounting policies later in this section . review of 2010 vs. 2011 replace_table_token_24_th the information systems and technology group 's revenues were down in 2011 compared with 2010. revenues in the mobile communication systems business were impacted unfavorably by crs and protracted u.s. customer acquisition cycles that slowed orders , resulting in lower revenues on ruggedized hardware products , including chs , and other products with shorter-term delivery timeframes . additionally , revenues on the canadian maritime helicopter project ( mhp ) were down in 2011 as the group transitioned from production to the training and support phase of the program . lower revenues in the group 's isr business resulted from the sale of a satellite facility in 2010 and lower optical products volume . offsetting these decreases were increased revenues in the it solutions and services business due to the 2011 acquisition of vangent , inc. , and higher volume on the group 's large-scale it infrastructure and support programs . operating earnings decreased at a lower rate than revenues , resulting in a 20-basis-point increase in operating margins . higher margins in our mobile communication systems business were in part due to $ 95 of overhead reduction initiatives , but were largely offset by growth in our lower-margin it solutions and services business . 38 2013 outlook we expect 2013 revenues in the information systems and technology group to be down approximately 5 percent from 2012 with operating margins in the low-8 percent range . our 2013 outlook assumes the u.s. government operates under a cr in fy 2013 and there are no significant reductions to the proposed defense budget . due to its shorter-cycle businesses , the information systems and technology outlook is more sensitive than our other defense groups to any additional budget reductions that may occur . corporate corporate results consist primarily of compensation expense for stock options . corporate operating costs totaled $ 83 in 2010 , $ 77 in 2011 and $ 69 in 2012 . we expect 2013 full-year corporate operating costs of approximately $ 90 , an increase from 2012 due to less income from the advanced funding of our primary pension plan . backlog and estimated potential contract value our total backlog , including funded and unfunded portions , was $ 51.3 billion at the end of 2012 compared with $ 57.4 billion at year-end 2011 . our backlog does not include work awarded on unfunded indefinite delivery , indefinite quantity ( idiq
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | net cash provided by operating activities $ 3,124 $ 2,855 $ 2,986 $ 3,238 $ 2,687 capital expenditures ( 490 ) ( 385 ) ( 370 ) ( 458 ) ( 450 ) free cash flow from operations $ 2,634 $ 2,470 $ 2,616 $ 2,780 $ 2,237 cash flow as a percentage of earnings ( loss ) from continuing operations : net cash provided by operating activities 126 % 119 % 114 % 127 % nm * free cash flow from operations 106 % 103 % 100 % 109 % nm * * not meaningful ( nm ) due to net loss in 2012. return on invested capital . we believe roic is a useful measure for investors because it reflects our ability to generate returns from the capital we have deployed in our operations . we use roic to evaluate investment decisions and as a performance measure in evaluating management . we define roic as net operating profit after taxes divided by the sum of the average debt and shareholders ' equity for the year . net operating profit after taxes is defined as earnings ( loss ) from continuing operations plus after-tax interest and amortization expense .
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in conjunction with our plans to continue to reduce costs , we expect to continue our real estate rationalization efforts and incur additional costs in 2021. additionally , as discussed further elsewhere herein , we are tracking pandemic impacts such as : ( i ) increases in certain revenue streams and decreases in others ( including late fee revenue ) , ( ii ) increases in allowances for credit losses each quarter since the start of the pandemic , ( iii ) increase in overtime expenses and ( iv ) delays in our cost transformation initiatives . thus far , these changes have not materially impacted our financial performance or financial position . this could change , however , if the pandemic intensifies or economic conditions deteriorate . the impact of the pandemic during 2021 will materially depend on additional steps that we may take in response to the pandemic and various events outside of our control , including the pace of vaccinations worldwide , the length and severity of the health crisis and economic slowdown , actions taken by governmental agencies or legislative bodies , and the impact of those events on our employees , suppliers and customers . for additional information , see the risk factor disclosures set forth or referenced in item 1a of part ii of this report . 35 for additional information on the impacts of the pandemic , see the remainder of this item , including `` —liquidity and capital resources — overview of sources and uses of cash , `` and `` — pension and post-retirement benefit obligations . `` reporting segments our reporting segments are organized by customer demographics . at december 31 , 2020 , they consisted of : international and global accounts management ( `` igam `` ) segment . under our igam segment , we provided our products and services to approximately 200 global enterprise customers and three operating regions : europe middle east and africa , latin america and asia pacific ; enterprise segment . under our enterprise segment , we provided our products and services to large and regional domestic and global enterprises , as well as the public sector , which includes the u.s. federal government , state and local governments and research and education institutions ; small and medium business ( `` smb `` ) segment . under our smb segment , we provided our products and services to small and medium businesses directly and indirectly through our channel partners ; wholesale segment . under our wholesale segment , we provided our products and services to a wide range of other communication providers across the wireline , wireless , cable , voice and data center sectors . our wholesale customers range from large global telecom providers to small regional providers ; and consumer segment . under our consumer segment , we provided our products and services to residential customers . additionally , certain state support payments , connect america fund ( “ caf ” ) federal support revenue , and other revenue from leasing and subleasing , including 2018 rental income associated with the 2017 failed-sale-leaseback are reported in our consumer segment as regulatory revenue . at december 31 , 2020 , we served 4.5 million consumer broadband subscribers . our methodology for counting consumer broadband subscribers may not be comparable to those of other companies . see note 16—segment information for additional information . at december 31 , 2020 , we categorized our products and services revenue among the following four categories for the igam , enterprise , smb and wholesale segments : ip and data services , which include primarily vpn data networks , ethernet , ip , content delivery and other ancillary services ; transport and infrastructure , which includes wavelengths , dark fiber , private line , colocation and data center services , including cloud , hosting and application management solutions , professional services and other ancillary services ; voice and collaboration , which includes primarily local and long-distance voice , including wholesale voice , and other ancillary services , as well as voip services ; and it and managed services , which include information technology services and managed services , which may be purchased in conjunction with our other network services . at december 31 , 2020 , we categorized our products and services revenue among the following four categories for the consumer segment : broadband , which includes high speed , fiber-based and lower speed dsl broadband services ; voice , which include local and long-distance services ; 36 regulatory revenue , which consist of ( i ) caf and other support payments designed to reimburse us for various costs related to certain telecommunications services and ( ii ) other operating revenue from the leasing and subleasing of space ; and other , which include retail video services ( including our linear tv services ) , professional services and other ancillary services . additionally , beginning in the first quarter of 2021 , we plan on making changes to the product category reporting to better reflect product life cycles and the company 's marketing approach . these changes will include both the creation of new product categories and the realignment of products and services within previously reported product categories . for business segment revenue , we will report the following product categories : compute & application services , ip & data services , fiber infrastructure services and voice & other , by customer-facing sales channel . for mass markets segment revenue , we will report the following product categories : consumer broadband , small business group ( `` sbg `` ) broadband , voice & other and caf phase ii . story_separator_special_tag small and medium business segment replace_table_token_14_th year ended december 31 , 2020 compared to the same periods ended december 31 , 2019 and december 31 , 2018 segment revenue decreased $ 170 million for the year ended december 31 , 2020 compared to december 31 , 2019 and decreased $ 191 million for the year ended december 31 , 2019 compared to december 31 , 2018 , primarily due to the following factors : for both periods , voice and collaboration revenue decreased due to continued declines in demand for traditional voice tdm services ; for the year ended 2020 compared to 2019 , transport and infrastructure revenue decreased primarily due to continued reductions in demand for our low-speed broadband , and for the year ended 2019 compared to 2018 , transport and infrastructure declined primarily due to lower equipment sales and lower demand for broadband services ; and for the year ended 2020 compared to 2019 , ip and data services decreased due to lower vpn revenue and customers transitioning from ethernet solutions to lower-rate ip services , and for the year ended 2019 compared to 2018 , ip and data services increased due to strength in vpn revenue . 44 segment expenses decreased by $ 70 million for the year ended december 31 , 2020 compared to december 31 , 2019 and decreased $ 48 million for the year ended december 31 , 2019 compared to december 31 , 2018 , primarily due to : for the year ended 2020 compared to 2019 due to lower cost of sales in line with lower revenue and lower headcount related costs ; and for the year ended 2019 compared to 2018 due to lower network costs driven by declines in customer demand , and network expense synergies . segment adjusted ebitda as a percentage of revenue was 69 % for the years ended december 31 , 2020 , 2019 and 2018. wholesale segment replace_table_token_15_th year ended december 31 , 2020 compared to the same periods ended december 31 , 2019 and december 31 , 2018 segment revenue decreased $ 265 million for the year ended december 31 , 2020 compared to december 31 , 2019 and decreased $ 318 million for the year ended december 31 , 2019 compared to december 31 , 2018 , primarily due to the following factors : for both periods , transport and infrastructure revenue decreased due to continued declines in traditional private line services and customer network consolidation and grooming efforts ; for both periods , voice and collaboration revenue decreased due to market rate compression and lower customer volumes ; and for the year ended 2020 compared to 2019 , ip and data services decreased due to customer churn . segment expenses decreased by $ 37 million for the year ended december 31 , 2020 compared to december 31 , 2019 , primarily due to lower cost of sales and continued network grooming efforts , partially offset by higher employee related costs , and decreased by $ 36 million for the year ended december 31 , 2019 compared to december 31 , 2018 , due to lower cost of sales and network grooming and operating synergies . segment adjusted ebitda as a percentage of revenue was 85 % , 85 % and 86 % for the year ended december 31 , 2020 , 2019 and 2018 , respectively . 45 consumer segment replace_table_token_16_th year ended december 31 , 2020 compared to the same periods ended december 31 , 2019 and december 31 , 2018 segment revenue decreased by $ 266 million for the year ended december 31 , 2020 compared to december 31 , 2019 and decreased by $ 477 million for the year ended december 31 , 2019 compared to december 31 , 2018 , primarily due to the following factors : for both periods , decreases in our voice and other revenue were driven by continued legacy voice customer losses and our de-emphasis of prism video product ; for the year ended december 31 , 2019 , regulatory revenue declined due to the derecognition of the failed-sales-leaseback described in our prior reports . for the year ended december 31 , 2020 , regulatory revenue declined due to lower state support revenue ; for both periods , an increase in broadband revenue driven by increased demand for higher-speed services and higher rates ; segment expenses decreased by $ 79 million for the year ended december 31 , 2020 compared to december 31 , 2019 and decreased by $ 255 million for the year ended december 31 , 2019 compared to december 31 , 2018. expenses decreased for both periods due to lower prism content costs , headcount related costs and marketing expenses . segment adjusted ebitda as a percentage of revenue was 88 % , 87 % and 84 % for the year ended december 31 , 2020 , 2019 and 2018 , respectively . critical accounting policies and estimates our consolidated financial statements are prepared in accordance with accounting principles that are generally accepted in the united states . the preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of our assets , liabilities , revenue and expenses . we have identified certain policies and estimates as critical to our business operations and the understanding of our past or present results of operations related to ( i ) goodwill , customer relationships and other intangible assets ; ( ii ) pension and post-retirement benefits ; ( iii ) loss contingencies and litigation reserves and ( iv ) income taxes . these policies and estimates are considered critical because they had a material impact , or they have the potential to have a material impact , on our consolidated financial statements and because they require us to make significant judgments , assumptions or estimates . we believe that the estimates , judgments and assumptions made when accounting for the items described below were
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | debt and other financing arrangements subject to market conditions , we expect to continue to issue debt securities from time to time in the future to refinance a substantial portion of our maturing debt , including issuing debt securities of certain of our subsidiaries to refinance their maturing debt to the extent feasible . the availability , interest rate and other terms of any new borrowings will depend on the ratings assigned by credit rating agencies , among other factors . 52 as of the date of this report , the credit ratings for the senior secured and unsecured debt of lumen technologies , level 3 financing , inc. and qwest corporation were as follows : borrower moody 's investors service , inc. standard & poor 's fitch ratings lumen technologies : unsecured b2 bb- bb secured ba3 bbb- bb+ level 3 financing , inc. : unsecured ba3 bb bb secured ba1 bbb- bbb- qwest corporation : unsecured ba2 bbb- bb+ our credit ratings are reviewed and adjusted from time to time by the rating agencies . any future downgrades of the senior unsecured or secured debt ratings of us or our subsidiaries could impact our access to capital or further raise our borrowing costs . see `` risk factors—financial risks '' in item 1a of part i of this report . net operating loss carryforwards as of december 31 , 2020 , lumen technologies had approximately $ 5.1 billion of federal net operating loss carryforwards . ( `` nols '' ) , which for u.s. federal income tax purposes can be used to offset future taxable income . these nols are primarily related to federal nols we acquired through the level 3 acquisition on november 1 , 2017 and are subject to limitations under section 382 of the internal revenue code and related u.s. treasury department regulations .
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global consumer solutions revenue is both transaction and subscription based and is derived from the sale of credit monitoring and identity theft protection products , which we deliver electronically to consumers primarily via the internet in the u.s. , canada , and the u.k. we reach consumers directly and indirectly through partners . we also sell consumer and credit information to resellers who combine our information with other information to provide direct to consumer monitoring , reports and scores . geographic information . we currently have significant operations in the following countries : argentina , australia , canada , chile , costa rica , ecuador , el salvador , honduras , india , mexico , new zealand , paraguay , peru , portugal , the republic of ireland , spain , the u.k. , uruguay and the u.s. we also offer equifax branded credit services in india and russia through joint ventures , we have investments in consumer and or commercial credit information companies through joint 29 ventures in cambodia , malaysia and singapore , and have an investment in a consumer and commercial credit information company in brazil . of the countries we operate in , 73 % of our revenue was generated in the u.s. during the twelve months ended december 31 , 2016 . key performance indicators . management focuses on a variety of key indicators to monitor operating and financial performance . these performance indicators include measurements of operating revenue , change in operating revenue , operating income , operating margin , net income , diluted earnings per share , cash provided by operating activities and capital expenditures . key performance indicators for the twelve months ended december 31 , 2016 , 2015 and 2014 , include the following : replace_table_token_5_th * amounts above also include capital expenditures in accounts payable . business environment and company outlook demand for our services tends to be correlated to general levels of economic activity and to consumer credit activity , both enhanced by our own initiatives to expand our products and markets served , and to small commercial credit and marketing activity . in 2017 , in the united states , we expect modest but improving growth in overall economic activity and consumer credit . mortgage market originations are expected to be down in the double digit range for the year . the economic environments impacting five of our six largest international operations , in the u.k. , australia , canada , argentina , and chile , are expected to strengthen in 2017 relative to 2016. in spain , economic growth is expected to remain good in 2017 , although somewhat slower than in 2016. in addition , at their current levels , weaker foreign exchange rates compared to the prior year , will negatively impact both growth in revenue and profit when reported in u.s. dollars . over the long term , we expect that our ongoing investments in new product innovation , business execution , enterprise growth initiatives , technology infrastructure , and continuous process improvement will enable us to deliver long-term multi-year average organic revenue growth ranging between 6 % and 8 % with additional growth of 1 % to 2 % derived from strategic acquisitions consistent with our long-term business strategy . we also expect to grow earnings per share at a somewhat faster rate than revenue over time as a result of both operating and financial leverage . 30 results of operations — twelve months ended december 31 , 2016 , 2015 and 2014 consolidated financial results operating revenue replace_table_token_6_th revenue for 2016 increased by 18 % compared to 2015. the growth was driven by broad-based organic growth due to revenue increases in mortgage , government , healthcare , and direct to consumer reseller verticals as well as the veda acquisition . the effect of foreign exchange rates reduced revenue by $ 75.2 million or 3 % in 2016 compared to 2015. revenue for 2015 increased by 9 % compared to 2014. this broad-based growth was organic , and was driven by revenue increases in mortgage , direct to consumer reseller , healthcare , government , and auto verticals . the effect of foreign exchange rates reduced revenue by $ 75.7 million or 3 % in 2015 compared to 2014. operating expenses replace_table_token_7_th cost of services . cost of services increased $ 226.0 million in 2016 compared to the prior year . the increase in cost of services , when compared to 2015 , was due to the increase in production costs driven by higher revenues including the veda acquisition , as well as increases in people costs , and to a lesser extent an increase in technology costs . the effect of changes in foreign exchange rates reduced cost of services by $ 21.4 million . cost of services increased $ 42.7 million in 2015 compared to the prior year . the increase in cost of services , when compared to 2014 , was due to the increase in production costs driven by higher revenues , as well as increases in people costs , and to a lesser extent an increase in professional services . the effect of changes in foreign exchange rates reduced cost of services by $ 25.3 million . selling , general and administrative expenses . selling , general and administrative expenses increased $ 63.9 million in 2016 as compared to 2015. the increase was due to veda selling , general and administrative expense and integration and transaction costs and increases in people costs across the business . the increase was offset by a decline in costs related to the 31 realignment of internal resources . the impact of changes in foreign currency exchange rates decreased our selling , general and administrative expenses by $ 23.7 million . story_separator_special_tag liabilities related to current payables , incentives and unearned income . fund transfer limitations . the ability of certain of our subsidiaries and associated companies to transfer funds to us may be limited , in some cases , by certain restrictions imposed by foreign governments . these restrictions do not , individually or in the aggregate , materially limit our ability to service our indebtedness , meet our current obligations or pay dividends . we currently hold $ 117.4 million of cash in our foreign subsidiaries . investing activities replace_table_token_18_th * amounts above exclude capital expenditures in accounts payable . our capital expenditures are used for developing , enhancing and deploying new and existing software in support of our expanding product set , replacing or adding equipment , updating systems for regulatory compliance , licensing of standard software applications , investing in system reliability , security and disaster recovery enhancements , and updating or expanding our office facilities . capital expenditures in 2016 and 2015 increased from 2015 and 2014 , respectively , as we are continuing to invest in new products and technology infrastructure . acquisitions , divestitures and investments replace_table_token_19_th 2016 acquisitions and investments . during the first quarter of 2016 , the company completed the acquisition of 100 % of the ordinary voting shares of veda for cash consideration of approximately $ 1.7 billion . during the first quarter of 2016 , we settled all of the foreign currency options related to the veda acquisition on the respective settlement dates for a net cash 38 payment of $ 10.8 million . during the third quarter of 2016 , the company completed the acquisition of barnett and computersoft . refer to note 3 for more information on these acquisitions . 2015 acquisitions and investments . during the first quarter of 2015 , we acquired a 75 % equity interest investment in a debt collections and recovery management venture in the u.k. , as more fully described in note 1. during the third quarter of 2015 , we received $ 2.9 million proceeds from the escrow related to a past disposition . we did not make significant investments in unconsolidated affiliates during 2015 . 2014 acquisitions and investments . during the first quarter of 2014 , we acquired tdx , included as part of our international operating segment , and forseva , included as part of our usis operating segment . we invested $ 2.5 million in our joint venture in india during 2014. during the first quarter of 2013 , we divested two non-strategic business lines , equifax settlement services which was part of our mortgage business within the usis operating segment and talent management services which was part of our employer services business within our workforce solutions operating segment , for a total of $ 47.5 million . $ 3.5 million of the proceeds of the sale of talent management services was placed into an escrow account to be released to us at a later date . during 2014 , we received $ 0.6 million of the proceeds from the escrow . for additional information about our acquisitions , see note 3 of the notes to consolidated financial statements in this report . financing activities replace_table_token_20_th credit facility availability . our principal unsecured revolving credit facility with a group of banks , which we refer to as the revolver , permits us to borrow up to $ 900.0 million through november 2020. the revolver may be used for general corporate purposes . availability of the revolver for borrowings is reduced by the outstanding face amount of any letters of credit issued under the facility and , pursuant to our existing board of directors authorization , by the outstanding principal amount of our commercial paper ( cp ) notes . our $ 900.0 million cp program has been established to allow for borrowing through the private placement of cp with maturities ranging from overnight to 397 days . we may use the proceeds of cp for general corporate purposes . the cp program is supported by our revolver and , pursuant to our existing board of directors authorization , the total amount of cp which may be issued is reduced by the amount of any outstanding borrowings under our revolver . at december 31 , 2016 , the company had $ 310.3 million of cp and $ 0.5 million of letters of credit outstanding , and there were no borrowings outstanding under the revolver . at december 31 , 2016 , a total of $ 589.2 million was available under the revolver . at december 31 , 2016 , approximately 72 % of our debt was fixed rate and 28 % was effectively variable rate . our variable-rate debt consists of our issued commercial paper , which bears short-term interest rates based on the cp market for investment grade issuers . the interest rates reset periodically , depending on the terms of the respective financing arrangements . at december 31 , 2016 , interest rates on our variable-rate debt ranged from 1.0 % to 1.9 % . borrowing and repayment activity . net short-term borrowings ( repayments ) primarily represent borrowings or repayments of outstanding amounts under our cp program . we primarily borrow under our cp program , as needed and availability allows . 39 the increase in net short-term borrowings ( repayments ) primarily relates to the net activity of cp notes in 2016 , as well as the draw down on the 364-day revolver during the first quarter of 2016 and the pay off of the veda assumed debt in the first quarter and the 364-day revolver during the second quarter of 2016. the decrease in net short-term borrowings ( repayments ) in 2015 primarily relates to the net activity of cp notes in 2015 , and reflects the increase in cash flow from operations as well as no material acquisitions entered into during the year . on may 12 , 2016 , we issued
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | debt covenants . the outstanding indentures and comparable instruments contain customary covenants including , for example , limits on secured debt and sale/leaseback transactions . in addition , the senior credit facilities require us to maintain a maximum leverage ratio of not more than 3.5 to 1.0. as permitted under the terms of the senior credit facilities , we made the election to increase the covenant to 4.0 to 1.0 , effective for four consecutive quarters , beginning with the first quarter of 2016 and continuing through the fourth quarter of 2016. none of these covenants are considered restrictive to our operations and , as of december 31 , 2016 , the company was in compliance with all of our debt covenants . the company does not have any credit rating triggers that would accelerate the maturity of a material amount of the outstanding debt ; however , the 6.3 % senior notes due 2017 , 2.3 % senior notes due 2021 , 3.3 % senior notes due 2022 , 3.25 % senior notes due 2026 and 7.0 % senior notes due 2037 ( together , the “ senior notes ” ) contain change in control provisions . if the company experiences a change of control or publicly announces the company 's intention to effect a change of control and the rating on the senior notes is lowered by standard & poor 's , or s & p , and moody 's investors service , or moody 's , below an investment grade rating within 60 days of such change of control or notice thereof , then the company will be required to offer to repurchase the senior
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carshop and the car people currently operate as one reportable segment ( “ stand-alone used international ” ) and we anticipate that both will begin to operate under the carshop name in 2019. for the year ended december 31 , 2018 , these stand-alone used vehicle dealerships retailed 71,013 units and generated $ 1.3 billion in revenue . retail automotive dealerships represented 91.5 % of our total revenues and 89.6 % of our total gross profit in 2018. retail commercial truck dealership . we operate a heavy and medium duty truck dealership group known as premier truck group ( “ ptg ” ) with locations in texas , oklahoma , tennessee , georgia , and canada . as of december 31 , 2018 , 34 ptg operated twenty locations , offering primarily freightliner and western star branded trucks . one of these locations was acquired in april 2018 in canada . ptg also offers a full range of used trucks available for sale as well as service and parts departments , providing maintenance and repair services . this business represented 6.0 % of our total revenues and 6.2 % of our total gross profit in 2018. commercial vehicle distribution . we are the exclusive importer and distributor of western star heavy duty trucks ( a daimler brand ) , man heavy and medium duty trucks and buses ( a vw group brand ) , and dennis eagle refuse collection vehicles , together with associated parts , across australia , new zealand and portions of the pacific . this business , known as penske commercial vehicles australia ( “ pcv australia ” ) , distributes commercial vehicles and parts to a network of more than 70 dealership locations , including nine company-owned retail commercial vehicle dealerships . we are also a leading distributor of diesel and gas engines and power systems , principally representing mtu , detroit diesel , allison transmission , mtu onsite energy , and rolls royce power systems . this business , known as penske power systems ( “ pps ” ) , offers products across the on- and off-highway markets , construction , mining , marine , and defense , in australia , new zealand and portions of the pacific and supports full parts and aftersales service through a network of branches , field locations and dealers across the region . the on-highway portion of this business complements our pcv australia distribution business , including integrated operations at retail locations selling pcv brands . these businesses represented 2.5 % of our total revenues and 4.2 % of our total gross profit in 2018. penske truck leasing . we hold a 28.9 % ownership interest in penske truck leasing co. , l.p. ( “ ptl ” ) , a leading provider of transportation and supply chain services . ptl is capable of meeting customers ' needs across the supply chain with a broad product offering that includes full-service truck leasing , truck rental and contract maintenance , along with logistic services such as dedicated contract carriage , distribution center management , transportation management , lead logistics provider services and dry van truckload carrier services . on september 7 , 2017 , we acquired an additional 5.5 % ownership interest in ptl . prior to this acquisition , we held a 23.4 % ownership interest in ptl . ptl is currently owned 41.1 % by penske corporation , 28.9 % by us , and 30.0 % by mitsui & co. , ltd. ( “ mitsui ” ) . we account for our investment in ptl under the equity method , and we therefore record our share of ptl 's earnings on our statements of income under the caption “ equity in earnings of affiliates , ” which also includes the results of our other equity method investments . we recorded $ 129.5 million in equity earnings from this investment in 2018. outlook please see the discussion provided under “ outlook ” in part i , item 1 for a discussion of our outlook in our markets . operating overview automotive and commercial truck dealerships represent the majority of our results of operations . new and used vehicle revenues typically include sales to retail customers , to fleet customers , and to leasing companies providing consumer leasing . we generate finance and insurance revenues from sales of third-party extended service contracts , sales of third-party insurance policies , commissions relating to the sale of finance and lease contracts to third parties , and the sales of certain other products . service and parts revenues include fees paid by customers for repair , maintenance and collision services , and the sale of replacement parts and other aftermarket accessories , as well as warranty repairs that are reimbursed directly by various oems . our gross profit tends to vary with the mix of revenues we derive from the sale of new vehicles , used vehicles , finance and insurance products , and service and parts transactions . our gross profit varies across product lines , with vehicle sales usually resulting in lower gross profit margins and our other revenues resulting in higher gross profit margins . factors such as inventory and vehicle availability , customer demand , consumer confidence , unemployment , general economic conditions , seasonality , weather , credit availability , fuel prices and manufacturers ' advertising and incentives also impact the mix of our revenues , and therefore influence our gross profit margin . the results of our commercial vehicle distribution business in australia and new zealand are principally driven by the number and types of products and vehicles ordered by our customers . story_separator_special_tag as an example , if a dealership were acquired on january 15 , 2016 , the results of the acquired entity would be included in annual same-store comparisons beginning with the year ended december 31 , 2018 and in quarterly same-store comparisons beginning with the quarter ended june 30 , 2017. the results for 2018 include a tax benefit of $ 11.6 million , or $ 0.14 per share , recorded in the third quarter of 2018 for final adjustments to our provisional estimates per the u.s. tax cuts and jobs act and related staff accounting bulletin no . 118 ( discussed in “ income taxes ” within part ii , item 8 , note 17 ) . the results for 2018 also include a net benefit totaling $ 4.0 million after tax , or $ 0.05 per share , consisting of a $ 22.7 million net gain related to the sale of several retail automotive dealerships , partially offset by valuation adjustments with respect to certain franchised dealerships totaling $ 18.7 million . 39 retail automotive dealership new vehicle data ( in millions , except unit and per unit amounts ) replace_table_token_5_th units retail unit sales of new vehicles decreased from 2017 to 2018 due to an 8,962 unit , or 3.8 % , decrease in same-store new retail unit sales , coupled with a 3,848 unit decrease from net dealership divestitures . new units decreased 6.1 % in the u.s. and 3.7 % internationally . same-store units decreased 2.9 % in the u.s. due to a decrease in premium , volume foreign , and domestic brand sales . same-store units decreased 5.1 % internationally primarily due to a shortage of product availability in the fourth quarter , resulting from the new “ worldwide harmonised light vehicle testing procedure ” ( wltp ) fuel economy testing and emissions standards applicable to new vehicles sold in europe beginning september 2018. the decrease from 2016 to 2017 is due to a 10,222 unit , or 4.2 % , decrease in same-store new retail unit sales , offset by a 9,301 unit increase from net dealership acquisitions during the year . new units decreased 1.7 % in the u.s. and increased 1.8 % internationally . same-store units decreased 3.3 % in the u.s. , primarily due to a decrease in premium and domestic brand sales . same-store units decreased 5.8 % internationally , primarily due to a decline in unit sales in germany that offset the strength of unit sales in the u.k. revenues new vehicle retail sales revenue decreased from 2017 to 2018 due to a $ 34.5 million decrease from net dealership divestitures , offset by a $ 22.4 million , or 0.2 % , increase in same-store revenues . excluding $ 154.4 million of favorable foreign currency fluctuations , same-store new retail revenue decreased 1.4 % . the same-store revenue increase is due to the $ 1,630 per unit increase in comparative average selling prices ( including a $ 680 per unit increase attributable to favorable foreign currency fluctuations ) , which increased revenue by $ 370.2 million , partially offset by a decrease in same-store new retail unit sales , which decreased revenue by $ 347.8 million . the increase from 2016 to 2017 is due to a $ 423.8 million increase from net dealership acquisitions , offset by a $ 292.4 million , or 3.2 % , decrease in same-store revenues . excluding $ 158.8 million of negative foreign currency fluctuations , same-store new retail revenue decreased 1.4 % . the same-store revenue decrease is due to a decrease in same-store new retail unit sales , which decreased revenue by $ 392.2 million , offset by the $ 431 per unit increase in comparative average 40 selling prices per unit ( offset by a $ 686 per unit decrease attributable to negative foreign currency fluctuations ) , which increased revenue by $ 99.8 million . gross profit retail gross profit from new vehicle sales decreased from 2017 to 2018 due to a $ 26.3 million , or 3.7 % , decrease in same-store gross profit , offset by a $ 4.7 million increase from net dealership acquisitions . excluding $ 12.7 million of favorable foreign currency fluctuations , same-store gross profit decreased 5.5 % . the decrease in same-store gross profit is due to a decrease in same-store new retail unit sales , which decreased gross profit by $ 26.8 million , partially offset by a $ 2 per unit increase in the average gross profit per new vehicle retailed ( including a $ 56 per unit increase attributable to favorable foreign currency fluctuations ) , which increased gross profit by $ 0.5 million . the increase from 2016 to 2017 is due to a $ 37.2 million increase from net dealership acquisitions , offset by a $ 24.8 million , or 3.5 % , decrease in same-store gross profit during the year . excluding $ 12.3 million of negative foreign currency fluctuations , same-store gross profit decreased 1.8 % . the decrease in same-store gross profit is due to the decrease in same-store new retail unit sales , which decreased gross profit by $ 30.1 million , offset by a $ 23 per unit increase in the average gross profit per new vehicle retailed ( offset by a $ 53 per unit decrease attributable to negative foreign currency fluctuations ) , which increased gross profit by $ 5.3 million . retail automotive dealership used vehicle data ( in millions , except unit and per unit amounts ) replace_table_token_6_th units retail unit sales of used vehicles increased from 2017 to 2018 due to a 25,570 unit increase from net dealership acquisitions , coupled with a 4,050 unit , or 2.0 % , increase in same-store used retail unit sales . used units increased 27.4 % internationally and decreased 2.2 % in the u.s. the decrease of 2.2 % is due to the divestiture of several franchised dealerships
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows the following table summarizes the changes in our cash provided by ( used in ) operating , investing , and financing activities . the major components of these changes are discussed below . replace_table_token_22_th cash flows from continuing operating activities cash flows from continuing operating activities includes net income , as adjusted for non-cash items and the effects of changes in working capital . we finance substantially all of the commercial vehicles we purchase for distribution , new vehicles for retail sale , and a portion of our used vehicle inventories for retail sale , under floor plan and other revolving arrangements with various lenders , including the captive finance companies associated with automotive manufacturers . we retain the right to select which , if any , financing source to utilize in connection with the procurement of vehicle inventories . many vehicle manufacturers provide vehicle financing for the dealers representing their brands ; however , it is not a requirement that we utilize this financing . historically , our floor plan finance source has been based on aggregate pricing considerations . in accordance with generally accepted accounting principles relating to the statement of cash flows , we report all cash flows arising in connection with floor plan notes payable with the manufacturer of a particular new vehicle as an operating activity in our statement of cash flows , and all cash flows arising in connection with floor plan notes payable to a party other than the manufacturer of a particular new vehicle , all floor plan notes payable relating to pre-owned vehicles , and all floor plan notes payable related to our commercial vehicles in australia and new zealand , as a financing activity in our statement of cash flows .
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risk factors. operating overview new and used vehicle revenues include sales to retail customers and to leasing companies providing consumer automobile leasing . we generate finance and insurance revenues from sales of third-party extended service contracts , sales of third-party insurance policies , commissions relating to the sale of finance and lease contracts to third parties and the sales of certain other products . service and parts revenues include fees paid for repair , maintenance and collision services , and the sale of replacement parts and other aftermarket accessories . 24 our gross profit tends to vary with the mix of revenues we derive from the sale of new vehicles , used vehicles , finance and insurance products , and service and parts transactions . our gross profit varies across product lines , with vehicle sales usually resulting in lower gross profit margins and our other revenues resulting in higher gross profit margins . factors such as inventory and vehicle availability , customer demand , consumer confidence , unemployment , general economic conditions , seasonality , weather , credit availability , fuel prices and manufacturers ' advertising and incentives also impact the mix of our revenues , and therefore influence our gross profit margin . aggregate gross profit increased $ 251.1 million , or 14.3 % , during 2012 compared to 2011. the increase in gross profit is largely attributable to a 9.9 % increase in same store retail revenue . our retail gross margin percentage declined from 16.8 % during 2011 to 16.3 % during 2012 , due primarily to lower gross margin on new and used vehicle retail sales as well as an increase in the percentage of our revenues generated by vehicle sales , which carry a lower gross margin than other parts of our business . our selling expenses consist of advertising and compensation for sales personnel , including commissions and related bonuses . general and administrative expenses include compensation for administration , finance , legal and general management personnel , rent , insurance , utilities , and other expenses . as the majority of our selling expenses are variable , and we believe a significant portion of our general and administrative expenses are subject to our control , we believe our expenses can be adjusted over time to reflect economic trends . floor plan interest expense relates to financing incurred in connection with the acquisition of new and used vehicle inventories that is secured by those vehicles . other interest expense consists of interest charges on all of our interest-bearing debt , other than interest relating to floor plan financing . the cost of our variable rate indebtedness is based on the prime rate , defined london interbank offered rate ( libor ) , the bank of england base rate , the finance house base rate , or the euro interbank offered rate . our floor plan interest expense has increased during 2012 as a result of higher applicable interest rates due to the impact of interest rate swap transactions that began in 2012 , as well as an increase in the amounts outstanding under floor plan arrangements . our other interest expense has increased during 2012 due to the increase in borrowings under our revolving credit agreements in the u.s. and u.k. due to significant acquisitions in 2012. equity in earnings of affiliates represents our share of the earnings from our investments in joint ventures and other non-consolidated investments , including ptl . because ptl is engaged in different businesses than we are , its operating performance may vary significantly from ours . the future success of our business is dependent upon , among other things , general economic and industry conditions , our ability to consummate and integrate acquisitions , the level of vehicle sales in the markets where we operate , our ability to increase sales of higher margin products , especially service and parts services , our ability to realize returns on our significant capital investment in new and upgraded dealership facilities and the return realized from our investments in various joint ventures and other non-consolidated investments . see item 1a risk factors and forward-looking statements below . critical accounting policies and estimates the preparation of financial statements in accordance with accounting principles generally accepted in the united states of america requires the application of accounting policies that often involve making estimates and employing judgments . such judgments influence the assets , liabilities , revenues and expenses recognized in our financial statements . management , on an ongoing basis , reviews these estimates and assumptions . management may determine that modifications in assumptions and estimates are required , which may result in a material change in our results of operations or financial position . the following are the accounting policies applied in the preparation of our financial statements that management believes are most dependent upon the use of estimates and assumptions . 25 revenue recognition vehicle , parts and service sales we record revenue when vehicles are delivered and title has passed to the customer , when vehicle service or repair work is completed and when parts are delivered to our customers . sales promotions that we offer to customers are accounted for as a reduction of revenues at the time of sale . rebates and other incentives offered directly to us by manufacturers are recognized as a reduction of cost of sales . reimbursements of qualified advertising expenses are treated as a reduction of selling , general and administrative expenses . the amounts received under certain manufacturer rebate and incentive programs are based on the attainment of program objectives , and such earnings are recognized either upon the sale of the vehicle for which the award was received , or upon attainment of the particular program goals if not associated with individual vehicles . story_separator_special_tag revenues new vehicle retail sales revenue increased $ 1.14 billion , or 20.3 % , from 2011 to 2012 and increased $ 532.7 million , or 10.4 % , from 2010 to 2011. the increase from 2011 to 2012 is due to a $ 687.4 million , or 12.6 % , increase in same-store revenues , coupled with a $ 455.6 million increase from net dealership acquisitions during the year . the same store revenue increase is due primarily to the 12.9 % increase in same store unit sales , which increased revenue by $ 699.4 million , somewhat offset by an $ 83 , or 0.2 % , decrease in comparative average selling prices per unit , which decreased revenue by $ 12.0 million . the increase from 2010 to 2011 is due to a $ 299.0 million , or 6.0 % , increase in same store revenues , coupled with a $ 233.7 million increase from net dealership acquisitions during the year . the same store revenue increase is due primarily to a $ 2,012 , or 5.7 % , increase in average selling prices per unit , which increased revenue by $ 283.7 million , coupled with the 0.3 % increase in new retail unit sales , which increased revenue by $ 15.3 million . we believe the changes in comparative average selling price per unit were driven in part by inventory availability in our japanese volume foreign brands as a result of the march 2011 tsunami . gross profit retail gross profit from new vehicle sales increased $ 79.6 million , or 17.0 % , from 2011 to 2012 , and increased $ 49.1 million , or 11.7 % , from 2010 to 2011. the increase from 2011 to 2012 is due to a $ 40.4 million , or 8.9 % , increase in same store gross profit , coupled with a $ 39.2 million increase from net dealership acquisitions during the year . the same store increase is due primarily to the 12.9 % increase in new retail unit sales , which increased gross profit by $ 56.4 million , somewhat offset by a $ 111 , or 3.5 % , decrease in average gross profit per new vehicle retailed , which decreased gross profit by $ 16.0 million . we believe that the changes in gross 29 profit per unit and gross margin in 2012 and 2011 were driven in part by inventory availability of japanese brands as a result of the march 2011 tsunami . inventory levels normalized in 2012. the increase from 2010 to 2011 is due to a $ 30.3 million , or 7.4 % , increase in same store gross profit , coupled with a $ 18.8 million increase from net dealership acquisitions during the year . the same store increase is due primarily to a $ 206 , or 7.1 % , increase in the average gross profit per new vehicle retailed , which increased gross profit by $ 29.0 million , coupled with the 0.3 % increase in retail unit sales , which increased gross profit by $ 1.3 million . used vehicle data replace_table_token_7_th units retail unit sales of used vehicles increased 24,079 units , or 19.8 % , from 2011 to 2012 and increased 18,279 units , or 17.7 % , from 2010 to 2011. the increase from 2011 to 2012 is due to a 13,692 unit , or 11.6 % , increase in same store retail unit sales , coupled with a 10,387 unit increase from net dealership acquisitions . same store units increased 14.2 % in the u.s. and 6.2 % internationally . the same store increases were driven by an 11.0 % increase in our premium brands , a 12.6 % increase in our volume foreign brands , and a 11.3 % increase in our domestic brands . we believe that overall our same store used vehicle sales are being positively impacted by improved market conditions including increased credit availability , pent-up demand , an increase in trade-in units due to an increase in new unit sales , and our focus on retailing trade-ins and minimizing wholesaled vehicles . the increase from 2010 to 2011 is due to a 14,437 or 14.2 % , increase in same store used retail unit sales , coupled with a 3,842 unit increase from net dealership acquisitions . the same store increase was due primarily to unit sales increases in premium and volume foreign brand stores in the u.s. and premium brands in the u.k. revenues used vehicle retail sales revenue increased $ 509.0 million , or 15.7 % , from 2011 to 2012 and increased $ 510.1 million , or 18.7 % , from 2010 to 2011. the increase from 2011 to 2012 is due to a $ 260.1 million , or 8.2 % , increase in same store revenues , coupled with a $ 248.9 million increase from net dealership acquisitions . the same store revenue increase is due to the 11.6 % increase in same store retail unit sales , which increased revenue by $ 354.9 million , somewhat offset by an $ 802 , or 3.0 % , decrease in comparative average selling prices per unit , which decreased revenue by $ 94.8 million . the increase from 2010 to 2011 is due to a $ 407.9 million , or 15.1 % , increase in same store revenues , coupled with a $ 102.2 million increase from net dealership acquisitions during the year . the same store revenue increase is due to the 14.2 % increase in same store retail unit sales , which increased revenue by $ 385.8 million , coupled with a $ 217 , or 0.8 % , increase in comparative average selling price per unit , which increased revenue by $ 22.1 million . 30 gross profit retail gross profit from used vehicle sales increased $ 30.4 million , or 12.0 % , from 2011 to 2012 and increased
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows cash and cash equivalents increased by $ 16.6 million , $ 9.0 million and $ 4.1 million during 2012 , 2011 and 2010 , respectively . the major components of these changes are discussed below . cash flows from continuing operating activities cash provided by continuing operating activities was $ 327.9 million , $ 133.3 million , and $ 207.4 million during 2012 , 2011 , and 2010 , respectively . cash flows from continuing operating activities includes net income , as adjusted for non-cash items and the effects of changes in working capital . we finance substantially all of our new and a portion of our used vehicle inventories under revolving floor plan notes payable with various lenders . we retain the right to select which , if any , financing source to utilize in connection with the procurement of vehicle inventories . many vehicle manufacturers provide vehicle financing for the dealers representing their brands ; however , it is not a requirement that we utilize this financing . historically , our floor plan finance source has been based on aggregate pricing considerations . 38 in accordance with generally accepted accounting principles relating to the statement of cash flows , we report all cash flows arising in connection with floor plan notes payable with the manufacturer of a particular new vehicle as an operating activity in our statement of cash flows , and all cash flows arising in connection with floor plan notes payable to a party other than the manufacturer of a particular new vehicle and all floor plan notes payable relating to pre-owned vehicles as a financing activity in our statement of cash flows . currently , the majority of our non-trade vehicle financing is with other manufacturer captive lenders . to date , we have not experienced any material limitation with respect to the amount or availability of financing from any institution providing us vehicle financing .
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in addition , our determination of the amount of the allowance for loan losses is subject to review by the new jersey department of banking and insurance and the fdic , as part of their examination process . after a review of the information available , our regulators might require the establishment of an additional allowance . any increase in the loan loss allowance required by regulators would have a negative impact on our earnings . other-than-temporary impairment of securities if the fair value of a security is less than its amortized cost , the security is deemed to be impaired . management evaluates all securities with unrealized losses quarterly to determine if such impairments are “ temporary ” or “ other-than-temporary ” in accordance with accounting standards codification ( “ asc ” ) topic 320 , investments – debt and equity securities . accordingly , temporary impairments are accounted for based upon the classification of the related securities as either available for sale or held to maturity . temporary impairments on available for sale securities are recognized , on a tax-effected basis , through other comprehensive income ( “ oci ” ) with offsetting entries adjusting the carrying value of the securities and the balance of deferred taxes . conversely , the carrying values of held to maturity securities are not adjusted for temporary impairments . information concerning the amount and duration of temporary impairments on both available for sale and held to maturity securities is generally disclosed in the notes to the con solidated financial statements . other-than-temporary impairments are accounted for based upon several considerations . first , other-than-temporary impairments on debt securities that the company has decided to sell as of the close of a fiscal period , or will , more likely than not , be required to sell prior to the full recovery of fair value to a level equal to or exceeding amortized cost , are recognized in earnings . if neither of these conditions regarding the likelihood of the sale of debt securities are applicable , then the other-than-temporary impairment is bifurcated into credit-related and noncredit-related components . a credit-related impairment represents the amount by which the present value of the cash flows that are expected to be collected on a debt security fall below its amortized cost . the noncredit-related component represents the remaining portion of the impairment not otherwise designated as credit-related . credit-related other-than-temporary impairments are recognized in earnings and noncredit-related other-than-temporary impairments are recognized in oci . equity securities on which there is an unrealized loss that is deemed other-than-temporary are written down to fair value with the writ e-down recognized in earnings . deferred income taxes the company records income taxes using the asset and liability method . accordingly , deferred tax assets and liabilities : ( i ) are recognized for the expected future tax consequences of events that have been recognized in the consolidated financial statements or the consolidated and separate entity tax returns ; ( ii ) are attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases ; and ( iii ) are measured using enacted tax rates expected to apply in the years when those temporary differences are expected to be recovered or settled . in assessing the realizability of deferred tax assets , management considers whether it is more likely than not that some portion of the deferred tax assets will not be realized . in making this assessment , management considers the profitability of current core operations , future market growth , forecasted earnings , future taxable income , and ongoing , feasible and permissible tax planning strategies . deferred tax assets have been reduced by a valuation allowance for all portions determined not likely to be realized . the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period of enactment . the valuation allowance is adjusted , by a charge or credit to income tax expense , as changes in facts and circumstances warrant . fair value measurements management uses its best judgment in estimating fair value measurements of the company 's financial instruments ; however , there are inherent weaknesses in any estimation technique . management utilized various inputs to determine fair value including but not limited to the use of , valuation techniques based on various assumptions , including , but not limited to cash flows , discount rates , rate of return , adjustments for nonperformance and liquidity , quoted market prices , and appraisals . therefore , for substantially all financial instruments , the fair value estimates herein are not necessarily indicative of the amounts the company could have realized in a sales transaction on the dates indicated . the estimated fair value amounts have been measured as of their respective year-ends and have not been re- evaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates . as such , the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amo unts reported at each year-end . 32 financial condition at december 31 , 201 5 and 201 4 total assets increased by $ 317.0 million , or 2 4 . 3 % , to $ 1 . 6 18 billion at december 31 , 201 5 from $ 1 . 302 billion at december 31 , 201 4 . the increase in total as sets resulted primarily from an increase in net loans receivable of $ 2 12 . 3 million , partially offset by a decrease in other real estate owned of $ 1.9 million . management is focusing on maintaining adequate liquidity in anticipation of funding loans in the loan pipeline as well as seeking opportunities to purchase loans in the secondary market that provide competitive returns but meet our internal underwriting guidelines . story_separator_special_tag the decrease in average yield reflects the competitive price environment prevalent in the company 's primary market area on loan facilities as well as the repricing downward of certain variable rate loans . interest income on securities decreased by $ 1.5 million , or 39.7 % , to $ 2.3 million for the year ended december 31 , 2014 from $ 3.8 million for the year ended december 31 , 2013. this decrease was primarily due to a decrease in the average balance of securities of $ 67.0 million or 47.7 % to $ 73.4 million for the year ended december 31 , 2014 from $ 140.4 million for the year ended december 31 , 2013 , partly offset by an increase in the average yield of securities to 3.11 % for the year ended december 31 , 2014 from 2.70 % for the year ended december 31 , 2014 . investment securities classified as held-to-maturity , which totaled $ 114.2 million at december 31 , 2013 , were sold in the third quarter of 2014 , except for approximately $ 9.8 million of such securities which were re-designated to available for sale securities . interest income on other interest-earning assets increased by $ 3,000 , or 5.8 % , to $ 55,000 for the year ended december 31 , 2014 from $ 52,000 for the year ended december 31 , 2013. this increase was primarily due to an increase of the average yield on other interest-earning assets to 0.22 % for the year ended december 31 , 2014 from 0.16 % for the year ended december 31 , 2013 , partly offset by a decrease of $ 7.3 million , or 22.7 % , in the average balance of other interest-earning assets to $ 24.7 million for the year ended december 31 , 2014 from $ 32.0 million for the year ended december 31 , 2013 .. the somewhat static nature of the average yield on other interest-earning assets reflects the current philosophy by the fomc of keeping short term interest rates at historically low levels for the last several years . total interest expense decreased by $ 273,000 , or 2.6 % , to $ 10.3 million for the year ended december 31 , 2014 from $ 10.6 million for the year ended december 31 , 2013. the decrease resulted primarily from a decrease in the cost of interest-bearing liabilities of seven basis points to 1.02 % for the year ended december 31 , 2014 from 1.09 % for the year ended december 31 , 2013 , partly offset by a n increase in the average balance of interest bearing liabilities of $ 39.8 million , or 4.1 % , to $ 1.015 billion for the year ended december 31 , 2014 from $ 974.7 million for the year ended december 31 , 2013. the decrease in the average cost of interest- bearing liabilities reflects the company 's reaction to the lower short term interest rate environment and our ability to reduce our pricing on a select number of retail deposit products . the provision for loan losses totaled $ 2.8 0 million and $ 2.7 8 million for the years ended december 31 , 2014 and 2013 , respectively . the provision for loan losses is established based upon management 's review of the company 's loans and consideration of a variety of factors including , but not limited to , ( 1 ) the risk characteristics of the loan portfolio , ( 2 ) current economic conditions , ( 3 ) actual losses previously experienced , ( 4 ) the activity and fluctuating balance of loans receivable , and ( 5 ) the existing level of reserves for loan losses that are probable and estimable . during the year ended december 31 , 2014 , the company experienced $ 1.0 million in net charge-offs ( consisting of $ 1.4 million in charge-offs and $ 400,000 in recoveries ) . during the year ended december 31 , 2013 , the company experienced $ 771,000 in net charge-offs ( consisting of $ 971,000 in charge-offs and $ 200,000 in recoveries ) . the company had non-performing loans totaling $ 19.6 million , or 1.60 % , of gross loans at december 31 , 2014 and $ 20.6 million , or 1.98 % , of gross loans at december 31 , 2013. the decrease in non-performing loans resulted primarily from the sales of approximately $ 10.4 million in non-performing loans during the third quarter of 2014. the sale resulted in a pre-tax loss of approximately $ 4.0 million . the primary reason for these transactions was the elimination of carrying and legacy costs associated with these non-interest earning assets . the allowance for loan losses was $ 16.2 million , or 1.32 % , of gross loans at december 31 , 2014 as compared to $ 14.3 million , or 1.38 % , of gross loans at december 31 , 2013. the amount of the allowance is based on estimates and the ultimate losses may vary from such estimates . management assesses the allowance for loan losses on a quarterly basis and makes provisions for loan losses as necessary in order to maintain the adequacy of the allowance . while management uses available information to recognize losses on loans , future loan loss provisions may be necessary based on changes in the aforementioned criteria . in addition various regulatory agencies , as an integral part of their examination process , periodically review the allowance for loan losses and may require the company to recognize additional provisions based on their judgment of information available to them at the time of their examination . management believes that the allowance for loan losses was adequate at both december 31 , 2014 and december 31 , 2013. total non-interest income increased by $ 583,000 , or 17.3 % to $ 4.0 million for the year ended december 31 , 2014 compared with $
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash and cash equivalents in creased by $ 10 0 . 5 million , or 312.9 % , to $ 1 32.6 million at december 31 , 201 5 from $ 32.1 million at december 31 , 201 4 . loans receivable , net increased by $ 212 . 3 million , or 17.6 % , to $ 1.420 billion at december 31 , 2015 from $ 1.208 billion at december 31 , 2014. the increase resulted primarily from a $ 224.2 million increase in real estate mortgages comprising commercial and multi-family , construction and participation loans with other financial institutions along with an increase of a $ 13.8 million in commercial business loans and commercial lines of credit , partially offset by a decrease of $ 21.1 million in residential real estate loans , a $ 2.8 million decrease in home equity and home equity lines of credit and a $ 1.9 million increase in the allowance for loan losses . as of december 31 , 2015 , the allowance for loan losses was $ 18.0 million , or 77.0 % , of non-performing loans and 1.25 % of gross loans , as compared to $ 16.2 million or 2.4 % of non-performing loans and 1.32 % of gross loans at december 31 , 2014 .
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our most robust period of growth occurred in the three years following the onset of the financial crisis in 2008 , when many industry sector managing directors sought to transition from highly regulated , large , diversified financial institutions to independent advisory firms such as greenhill . while we continue to focus on managing our business in a disciplined manner , and over the past three years have recruited fewer managing directors as compared to the period from 2008 through 2010 , we intend to continue our efforts to recruit new managing directors with industry sector experience and or geographic reach who can help expand our advisory capabilities . we had 66 client facing managing directors as of january 1 , 2015 , and added one additional managing director and announced the addition of 2 more managing directors ( through february 24 , 2015 ) and will add 8 more managing directors when we complete the acquisition of cogent , which is anticipated to occur around the end of the first quarter of 2015. prior to 2011 , we also engaged in merchant banking activities , consisting primarily of management of and investment in greenhill 's merchant banking funds , gcp i , gcp ii , gcp iii , gsavp and gcp europe , which are families of merchant banking funds . at the time of our exit from such activities an entity principally owned by former greenhill employees and independent from greenhill , took over the management of our merchant banking funds . since our exit from the merchant banking business , we have sought to realize value from our remaining principal investments and have sold or transferred substantially all of our investments in previously sponsored merchant banking funds and our previous investment in iridium . beginning in 2011 , as a result of our exit from the management of the merchant banking funds , we no longer generated management fees . since 2011 , our investment revenues consist entirely of gains ( or losses ) realized on the sale of our investments in the merchant banking funds and iridium , and changes in the unrealized value of the estimated fair market value and quoted values of such investments . as a result of the monetization of substantially all of our investments , we do not expect to report meaningful investment revenues or losses in future periods . at december 31 , 2014 , we held remaining investments in merchant banking funds with an estimated fair value of $ 4.2 million . at december 31 , 2014 , we employed 305 people . we strive to maintain a work environment that fosters professionalism , excellence , diversity , and cooperation among our employees worldwide . we utilize a comprehensive evaluation process at the 25 end of each year to measure performance , determine compensation and provide guidance on opportunities for continued development . business environment economic and global financial market conditions can materially affect our financial performance . in addition , revenues and net income in any period may not be indicative of full-year results or the results of any other period and may vary significantly from year to year and quarter to quarter . see “ risk factors . ” our advisory revenues were $ 280.5 million in the year ended december 31 , 2014 compared to $ 287.0 million in the year ended december 31 , 2013 , which represents a decrease of 2 % . this decrease resulted principally from a decrease in transaction completion fees , which were generally smaller in scale than 2013. at the same time , on a global basis , the number of completed transactions was up only 8 % for the year and completed transaction volume was up 17 % ( 1 ) . while the m & a market improved in 2014 , we had an essentially flat revenue outcome . there were several factors that led to this revenue outcome , including the fact that our important foreign markets saw less improvement than the u.s. market , a strong dollar that diminished the value of overseas fees and the impact of some personnel changes that we believe will enhance the long term potential of the firm . we do not regard this revenue outcome as reflective of our longer term growth potential . in 2014 , we advised on transactions for the first time for such leading companies around the world as aa limited , anixter international inc. , boart longyear ltd. , cerner corporation , dillard 's inc. , london stock exchange group plc , mannkind corporation , nippon television holdings , reckitt benckiser and voya financial , inc. we also advised on new transactions in all major markets for clients for whom we had previous engagements such as actavis plc , alcoa inc. , at & t inc. , gannett co. , inc. , tesco plc , tui ag and validus holdings , ltd. by geographic region in 2014 , our advisory revenues were relatively well dispersed throughout the regional markets in which we operate with an increased contribution from north america , where we generated in excess of 59 % of our revenues , which is consistent with the increase in transaction activity generally in that region . most of our other 2014 advisory revenues were generated in europe , where we derived 30 % of our revenues , which was a slight decline from the strong prior year level of contribution . in australia , the scale of transactions on which we advised declined from the prior year . by industry in 2014 , improved performance in the communications & media , consumer & retail and general industrials sectors generally offset a decline in activity in the technology , real estate and financial sectors . while merger and acquisition assignments continued to be our largest revenue source , we benefited from a significant increase in revenue from financing and restructuring advisory assignments . story_separator_special_tag as a result of the sale of substantially all of our investments , we do not expect to report significant investment revenues in future periods . we recognize revenue on investments in merchant banking funds based on our allocable share of realized and unrealized gains ( or losses ) reported by such funds on a quarterly basis . investments held by merchant banking funds are recorded at estimated fair value . because of the inherent uncertainty of valuations as well as the discounts applied , the estimated fair value of investments in privately held companies may differ significantly from the values that would have been used had a ready market for the securities existed . see “ item 2. management 's discussion and analysis of financial condition and results of operations — critical accounting policies and estimates — revenue recognition — investment revenues ” . during our period of ownership of iridium , which ended in december 2013 , we recognized gains or losses from our investment in iridium from marking to market our holdings at the end of each period to record unrealized gains or losses based upon the quoted market price for iridium common stock . to the extent we sold our share holdings in iridium for a price above or below our mark for the previous reported period , we recognized realized gains or losses on such sales during the period of sale . for our remaining investments in the merchant banking funds , the size and timing of changes in the fair value are tied to a number of different factors , including the performance of the particular portfolio companies , general economic conditions in the debt and equity markets and other factors which affect the industries in which the funds are invested . we will continue to record realized and unrealized changes in the fair value of our investments on a quarterly basis until such investments are fully liquidated . adverse changes in general economic conditions , commodity prices , credit and public equity markets could negatively impact the amount of investment revenues we record in any period . 2014 versus 2013 . for the year ended december 31 , 2014 , we recorded an investment loss of $ 5.2 million compared to an investment gain of $ 0.2 million for the year ended december 31 , 2013 . the investment loss for 2014 principally resulted from the sales at a loss of portfolio company investments in our previously sponsored merchant banking fund investments . the net investment gain for 2013 principally resulted from interest income and an increase in the quoted market value of our investment in iridium , offset in part by an investment loss related to our previously sponsored merchant banking funds . 2013 versus 2012 . for the year ended december 31 , 2013 , we recorded an investment gain of $ 0.2 million compared to an investment loss of $ 6.4 million for the year ended december 31 , 2012 . the net gain of $ 6.6 million principally resulted from improved share price performance in the quoted value of iridium , which was marked to market , during 2013 compared to 2012 . during 2013 , we completed the sale of our investment in iridium , selling 5,084,016 common shares at an average price of $ 6.73 per share for proceeds of $ 34.2 million . we recognized a gain of $ 0.8 million on our 2013 sales as compared to a loss of $ 5.0 million in 2012. operating expenses we classify operating expenses as employee compensation and benefits expense and non-compensation expenses . operating expenses include travel , office space , communications , information services , depreciation , professional services and interest expense . a portion of certain costs are reimbursed by clients under the terms of client engagements . for the year ended december 31 , 2014 , total operating expenses were $ 207.8 million compared to $ 215.9 million of total operating expenses in 2013 . the decrease of $ 8.1 million , or 4 % , related to a decrease in our compensation and benefits expenses , as described in more detail below . our pre-tax income margin for 2014 and 2013 remained constant at 25 % . for the year ended december 31 , 2013 , total operating expenses were $ 215.9 million compared to $ 214.6 million of total operating expenses in 2012 . the increase of $ 1.3 million , or 1 % , related to an increase in our compensation and benefits expenses , partially offset by a decrease in non-compensation expenses as described in more detail below . our pre-tax income margin for 2013 and 2012 remained constant at 25 % . the following table sets forth information relating to our operating expenses , which are reported net of reimbursements of certain expenses by our clients : 31 replace_table_token_9_th compensation and benefits expenses the principal component of our operating expenses is employee compensation and benefits expenses , which we determine annually based on a percentage of revenues . the actual percentage of revenue is determined by management in consultation with the compensation committee at each year-end and based on such factors as the relative level of revenues , anticipated compensation requirements to retain and reward our employees , the cost to recruit and exit employees , the charge for amortization of restricted stock awards and related forfeitures and other relevant factors . the ratio of compensation to revenues has remained relatively constant over the past three years during which it has ranged from 53 % to 54 % . our compensation and benefits expenses principally consist of ( i ) base salary and benefits , ( ii ) amortization of long-term incentive compensation awards of restricted stock units and ( iii ) annual incentive compensation payable as cash bonus awards . base salary and benefits are paid ratably throughout the year . awards of restricted stock units are discretionary
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash and cash equivalents decreased by $ 7.6 million from december 31 , 2012 , including a decrease of $ 1.0 million resulting from the effect of the translation of foreign currency amounts into u.s. dollars at the year-end foreign currency conversion rates . we generated $ 67.8 million from operating activities , which consisted of $ 100.8 million from net income after giving effect to the non-cash items and a net increase in working capital of $ 33.0 million ( primarily due to an increase in advisory fees receivable due to a number of large transaction closings shortly prior to december 31 , 2013 ) . we generated $ 35.8 million from investing activities , which consisted of proceeds from the sale of iridium of $ 34.2 million , distributions from merchant banking fund investments of $ 1.3 million , partially offset by $ 0.6 million used to fund capital calls for our merchant banking fund investments and $ 1.2 million for the build out of office space and other capital needs . we used $ 110.2 million in financing activities , including $ 56.2 million for the payment of dividends , $ 42.5 million for open market repurchases of our common stock and $ 12.9 million for the repurchase of our common stock from employees in conjunction with the payment of tax liabilities in settlement of restricted stock units and $ 0.3 million for distributions to non-controlling interests , partially offset by net borrowings on our revolving loan facility of $ 1.7 million . 2012 . cash and cash equivalents decreased by $ 11.7 million from december 31 , 2011 , net of an increase of $ 0.2 million resulting from the effect of the translation of foreign currency amounts into u.s. dollars at the year-end foreign currency conversion rates . we generated $ 94.8 million from operating activities , which consisted of $ 93.4 million from net income after giving effect to the non-cash items and a net decrease in working capital of $ 1.3 million .
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34 the national economy , as well as the mid-atlantic region in which the company operates , continued to exhibit a solid economic performance throughout 2019. consumer confidence remains high as a result of certain positive economic trends such as reduced lending rates , low unemployment , stable housing prices and solid performance in the financial markets . these positive trends have been tempered by economic concerns over a lack of wage growth , the political environment , trade turmoil and the impact of regional conflict . these factors act to constrain economic activity from time to time on the part of both large and small businesses . despite the mixed business environment , the company has experienced consistent growth in focused areas while maintaining strong levels of liquidity , capital and credit quality . liquidity continues to remain strong due to borrowing lines with the federal home loan bank of atlanta and the federal reserve and the size and composition of the investment portfolio . at december 31 , 2019 , the bank remained above all “ well-capitalized ” regulatory requirement levels . tangible book value per common share increased by 9 % to $ 22.37 from $ 20.45 at december 31 , 2018. the company 's credit quality remained strong as non-performing assets represented 0.50 % of total assets at december 31 , 2019 compared to 0.46 % at december 31 , 2018. the ratio of net charge-offs to average loans was 0.03 % for 2019 , compared to 0.01 % for the prior year . total assets at december 31 , 2019 increased 5 % compared to december 31 , 2018. total loans at december 31 , 2019 , were $ 6.7 billion compared to $ 6.6 billion at december 31 , 2018. during this period , the composition of the portfolio shifted as total commercial loans grew 7 % while mortgage loans declined 8 % due to the refinance activity and the strategic decision to sell the majority of new mortgage loan production . consumer loans experienced a 10 % decline related to recent mortgage refinancing activity . during this period , total funded commercial loan production was a record $ 884 million . commercial loans originated during the current year had total unfunded commitments of $ 479 million as of december 31 , 2019. customer funding sources at year end 2019 , which include deposits plus other short-term borrowings from core customers , increased 8 % compared to year end 2018. the increase in customer funding sources was driven by increases in noninterest-bearing demand and money market savings accounts . the company reduced fhlb borrowings by 39 % during the year to assist in the management of the net interest margin . during the fourth quarter of 2019 , the company issued $ 175 million in subordinated debt . the proceeds from the debt provides capital for future growth in the real estate lending portfolio , in addition to providing funds to reduce higher priced funding sources . stockholders ' equity at december 31 , 2019 increased 6 % to $ 1.13 billion as compared to $ 1.07 billion at december 31 , 2018. the growth in stockholders ' equity during 2019 was due to net income net of the dividends paid to stockholders . during 2019 the company repurchased 668,000 shares , resulting in a $ 24.3 million reduction in stockholders ' equity . net interest income increased 2 % to $ 265.3 million compared to $ 260.4 million in 2018. for the year ended december 31 , 2019 , the net interest margin was 3.51 % compared to 3.60 % for the prior year . net interest income for the year ended december 31 , 2019 included $ 1.8 million in recovered interest income on acquired credit impaired loans as compared to $ 2.4 million in 2018. excluding these recoveries , the net interest margin would have been 3.48 % for the year ended december 31 , 2019 compared to 3.58 % for the year ended december 31 , 2018. the amortization of the fair value adjustments for 2019 was estimated to be 5 basis points on an annual basis compared to a 13 basis point impact for the prior year . compared to the prior year , average interest-earning assets grew 5 % with an increase of 11 basis points in the yield while average interest-bearing liabilities grew 3 % with an increase of 32 basis points in the rate paid . non-interest income increased 17 % in 2019 compared to 2018 driven by the increase in income from mortgage banking activities during 2019 , as favorable residential lending rates during the year resulted in a significant increase in mortgage loan originations . a fter excluding merger expenses from both years , non-interest expenses for the year ended december 31 , 2019 increased 6 % compared to the prior year due to the increase in compensation costs . net income for 2019 included the effect of merger expenses totaling $ 1.3 million , which was offset by the $ 1.8 million in recovered interest income from previously acquired credit impaired loans . the prior year included $ 11.8 million in merger expenses and $ 2.4 million of the interest recoveries , which resulted in an after-tax reduction to earnings per share of approximately $ 0.19 per share for 2018. pre-tax , pre-provision income , which adjusts for the merger expenses in both years in addition to the provision for loan losses , increased 4 % from 2018 to 2019 to a record $ 158.9 million . critical accounting policies 35 the company 's consolidated financial statements are prepared in accordance with generally accepted accounting principles ( “ gaap ” ) in the united states of america and follow general practices within the banking industry . application of these principles requires management to make estimates , assumptions , and judgments that affect the amounts reported in the financial statements and accompanying notes . story_separator_special_tag this guidance is effective for a public business entity that is an sec filer for its annual or any interim goodwill impairment tests in fiscal years beginning after december 15 , 2019. the adoption of this standard is not expected to have a material impact on the company 's financial position , results of operations or cash flows . the fasb issued update no . 2016-13 , current expected credit losses ( cecl ) , in june 2016. this guidance changes the impairment model for most financial assets measured at amortized cost and certain other instruments . entities will be required to use an expected loss model , replacing the incurred loss model that is currently in use . under the new guidance , an entity will measure all expected credit losses for financial instruments held at the reporting date based on historical experience , current conditions and reasonable and supportable forecasts . this will result in earlier recognition of loss allowances in most instances . credit losses related to available-for-sale debt securities ( regardless of whether the impairment is considered to be other-than-temporary ) will be measured in a manner similar to the present , except that such losses will be recorded as allowances rather than as reductions in the amortized cost of the related securities . with respect to trade and other receivables , loans , held-to-maturity debt securities , net investments in leases and off-balance-sheet credit exposures , the guidance requires that an entity estimate its lifetime expected credit loss and record an allowance resulting in the net amount expected to be collected to be reflected as the financial asset . entities will also be required to provide more disclosures , including information used to track credit quality by year of origination for most financing receivables . this guidance is effective for public business entities for the first interim or annual period beginning after december 15 , 2019. the company completed implementation of the guidance and will adopt it in the first quarter of 2020. as a part of the implementation , the company reconciled historical loan data , determined segmentation of the loan portfolio for application of the cecl calculation , determined the key assumptions , selected calculation methods , and established an internal controls framework . the company also used the services of an independent third party advisor to validate the conceptual soundness of the proposed methodology framework and of the cecl model . at the adoption date , exclusive of the reclassification of $ 2.8 million to the allowance for credit losses of amounts related to the previously acquired impaired loans , the estimated impact to retained earnings at transition date is expected to be approximately $ 2.0 million based on the expected performance of the economy at the transition date . future amounts of provision expense will depend on the size and composition of the loan portfolio , future economic conditions and borrower 's payment performance . 39 net interest income the largest source of the company 's operating revenue is net interest income , which is the difference between the interest earned on interest-earning assets and the interest paid on interest-bearing liabilities . for purposes of this discussion and analysis , the interest earned on tax-advantaged loans and tax-exempt investment securities has been adjusted to an amount comparable to interest subject to normal income taxes . the result is referred to as tax-equivalent interest income and tax-equivalent net interest income . the following discussion of net interest income should be considered in conjunction with the impact of the acquisition of washingtonfirst and a review of the information provided in the table that provides yields and rates on average balances . 2019 vs. 2018 net interest income for 2019 was $ 265.3 million compared to $ 260.4 million for 2018 , a 2 % increase . on a tax-equivalent basis , net interest income for 2019 was $ 270.1 million compared to $ 265.2 million for 2018. the net interest income growth during the current year from the prior year reflects the effects of the 11 basis point increase in the yield on interest-earning assets , which grew 5 % , which was largely offset by the 32 basis point growth in the rate paid on interest-bearing liabilities . overall , the net interest margin decreased to 3.51 % for 2019 compared to 3.60 % for 2018. an analysis of the net interest income performance is presented in the following tables . for the year ended december 31 , 2019 , net interest income included $ 1.8 million in recovered interest income on acquired credit impaired loans compared to $ 2.4 million for the prior year . exclusive of these recoveries the net interest margin would have been 3.48 % for the year ended december 31 , 2019 compared to 3.58 % for the year ended december 31 , 2018. additionally , the amortization of the fair value adjustments in 2019 associated with the acquisition of washingtonfirst was estimated to be a 5 basis point positive impact on the net interest margin for 2019 , compared to a 13 basis point impact for the prior year . replace_table_token_1_th 2018 vs. 2017 net interest income for 2018 was $ 260.4 million compared to $ 168.8 million for 2017 , a 54 % increase , due to growth in earning assets coupled with the overall increase in the associated yields on those assets . on a tax-equivalent basis , net interest income for 2018 was $ 265.2 million compared to $ 176.2 million for 2017. the following table provides an analysis of net interest income performance that reflects the net interest margin that increased to 3.60 % for 2018 compared to 3.55 % for 2017. net interest income for the year ended december 31 , 2018 included $ 2.4 million in recovered interest income on acquired credit impaired loans . this amount compares to interest recoveries of $ 1.1 million for 2017. exclusive of these
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity management liquidity is measured by a financial institution 's ability to raise funds through loan repayments , maturing investments , deposit growth , borrowed funds , capital and the sale of highly marketable assets such as investment securities and residential mortgage loans . the company 's liquidity position , considering both internal and external sources available , exceeded anticipated short-term and long-term needs at december 31 , 2019. management considers core deposits , defined to include all deposits other than time deposits of $ 100 thousand or more , to be a relatively stable funding source . core deposits equaled 67 % of total interest-earning assets at december 31 , 2019 . in addition , loan payments , maturities , calls and pay downs of securities , deposit growth and earnings contribute a flow of funds available to meet liquidity requirements . in assessing liquidity , management considers operating requirements , the seasonality of deposit flows , investment , loan and deposit maturities and calls , expected funding of loans and deposit withdrawals , and the market values of available-for-sale investments , so that sufficient funds are available on short notice to meet obligations as they arise and to ensure that the company is able to pursue new business opportunities . in addition to factors discussed above that can affect liquidity , the company 's growth , mortgage banking activities and changes in the liquidity of the investment portfolio due to fluctuations in interest rates are also taken into consideration . under this approach , implemented by the funds management subcommittee of alco under formal policy guidelines , the company 's liquidity position is measured weekly , looking forward at thirty day intervals from thirty ( 30 ) to three hundred sixty ( 360 ) days . the measurement is based upon the projection of funds sold or purchased position , along with ratios and trends developed to measure dependence on purchased funds and core growth .
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2 refund ordered by the isrs rulings for amounts collected prior to the last rate case , after which recoveries of related authorized revenues became part of base rates that went into effect in april 2018 . the second component relates to an estimate of $ 8 . 0 for revenues associated with the june 2018 isrs filing that was approved by the mopsc in september 2018. the after-tax impact of the provision reduced net income by $ 9.3 , or $ 0.18 per diluted share . additional isrs revenues are currently under appeal related to the january 2019 isrs filings with annual authorized revenue of $ 12.4. the estimated amount earned in fiscal year 2019 under this isrs order was $ 4.6. additionally , in future periods spire missouri will evaluate the need for an adjustment to the provision based upon new information and further developments . gas utility - spire alabama spire alabama is the largest natural gas distribution utility in the state of alabama and is regulated by the apsc . spire alabama 's service territory is located in central and northern alabama . among the cities served by spire alabama are birmingham , the center of the largest metropolitan area in the state , and montgomery , the state capital . spire alabama purchases natural gas through interstate and intrastate suppliers and distributes the purchased gas through its distribution facilities for sale to residential , commercial and industrial customers and other end-users of natural gas . spire alabama also provides transportation services to large industrial and commercial customers located on its distribution system . these transportation customers , using spire alabama as their agent or acting on their own , purchase gas directly from marketers or suppliers and arrange for delivery of the gas into the spire alabama distribution system . spire alabama charges a fee to transport such customer-owned gas through its distribution system to the customers ' facilities . gas utility - spire energysouth spire gulf and spire mississippi are utilities engaged in the purchase , retail distribution and sale of natural gas to approximately 100,000 customers in southern alabama and south-central mississippi . spire gulf is regulated by the apsc , and spire mississippi is regulated by the mspsc . gas marketing spire marketing inc. is engaged in the marketing of natural gas and related activities on a non-regulated basis and is reported in the gas marketing segment . spire marketing markets natural gas across the central and southern u.s. it holds firm transportation and storage contracts in order to effectively manage its transactions with counterparties , which primarily include producers , municipalities , electric and gas utility companies , and large commercial and industrial customers . other other components of the company 's consolidated information include : unallocated corporate items , including certain debt and associated interest costs ; spire stl pipeline , a subsidiary of spire which has constructed and , as of november 2019 , operates a 65-mile ferc-regulated pipeline to deliver natural gas into eastern missouri ; spire storage , a subsidiary of spire providing physical natural gas storage services ; and spire 's subsidiaries engaged in the operation of a propane pipeline , the compression of natural gas , and risk management , among other activities . 28 business evaluation factors based on the nature of the business of the company and its subsidiaries , as well as current economic conditions , management focuses on several key variables in evaluating the financial condition and results of operations and managing the business . for the gas utility segment , these include : the utilities ' ability to recover from their customers the costs of purchasing and distributing natural gas ; the impact of weather and other factors , such as customer conservation , on revenues and expenses ; changes in the regulatory environment at the federal , state , and local levels , as well as decisions by regulators , that impact the utilities ' ability to earn the authorized rate of return in each of the service territories they serve ; the utilities ' ability to access credit markets and maintain working capital sufficient to meet operating requirements ; the effect of natural gas price volatility on the business ; and the ability to manage costs , integrate and standardize operations , and upgrade infrastructure . in the gas marketing segment , these include : the risks of competition ; fluctuations in natural gas prices ; the changing flow and availability of natural gas ; new national infrastructure projects ; the ability to procure firm transportation and storage services at reasonable rates ; credit and or capital market access ; counterparty risks ; and the effect of natural gas price volatility on the business . further information regarding how management seeks to manage these key variables is discussed below . gas utility the utilities seek to provide reliable natural gas services at a reasonable cost , while maintaining and building secure and dependable infrastructures . the utilities ' strategies focus on improving both performance and the ability to recover their authorized distribution costs and rates of return . the utilities ' distribution costs are the essential , primarily fixed , expenditures they must incur to operate and maintain more than 58,000 miles of mains and services comprising their natural gas distribution systems and related storage facilities . the utilities ' distribution costs include wages and employee benefit costs , depreciation and maintenance expenses , and other regulated utility operating expenses , excluding natural and propane gas expense . distribution costs are considered in the rate-making process , and recovery of these types of costs is included in revenues generated through the utilities ' tariff rates . spire missouri 's tariff rates are approved by the mopsc , whereas spire alabama 's tariff rates are approved by the apsc . spire gulf and spire mississippi have tariff rates that are approved by the apsc and mspsc , respectively . story_separator_special_tag replace_table_token_9_th replace_table_token_10_th replace_table_token_11_th consolidated spire 's operating revenues for the twelve months ended september 30 , 2019 were $ 12.6 lower than the same period in the prior year . operating revenues decreased by $ 27.6 at the gas utility segment and were $ 12.1 higher in the gas marketing segment . the gas utility decrease was due principally to lower gas cost recoveries , rate case tcja customer givebacks , impacts at spire missouri relating to isrs rulings , and weather/volumetric impacts ( net of volume mitigation ) that were only partly offset by missouri rate design changes , higher isrs , and favorable spire alabama rate stabilization and equalization ( rse ) renewal and giveback . the gas marketing increase was primarily due to higher volumes that offset the impact of slightly lower pricing . 35 spire 's contribution margin increased $ 17.9 compared with the same twelve -month period last year . the growth in contribution margin was primarily attributable to the gas utility segment , up $ 19.6 , with the missouri utilities up $ 11.0 and spire alabama up $ 7.0 , with remaining growth from the utilities of spire energysouth . gas marketing 's contribution margin was down $ 5.7 , reflecting a decline in basis differentials that was only partly offset by higher volumes combined with geographic expansion . depreciation and amortization expenses were higher in the gas utility segment , driven principally by continued infrastructure investment in both the missouri utilities and spire alabama . gas utility operation and maintenance ( “ o & m ” ) expenses were lower in the current year driven primarily by the missouri rate case write-offs in the prior year . these fluctuations are described in more detail below . gas utility operating revenues – gas utility operating revenues for fiscal 2019 decreased $ 27.6 compared to fiscal 2018 , and was attributable to the following factors : missouri utilities and spire alabama – lower pga/gsa gas cost recoveries $ ( 30.2 ) missouri utilities and spire alabama – rate case tcja customer giveback ( 24.3 ) missouri utilities and spire alabama – volumetric usage ( 12.4 ) missouri utilities – provision for isrs rulings ( 12.2 ) missouri utilities – 2018 rate case resets 32.2 missouri utilities – higher isrs 8.7 spire alabama – rse : net renewal and giveback 4.6 customer growth 2.7 all other factors 3.3 total variation $ ( 27.6 ) as shown in the table above , the decrease in revenues was driven primarily by a $ 30.2 reduction in gas cost recoveries , rate case tcja customer givebacks totaling $ 24.3 , $ 12.4 attributable to volumetric usage , and a $ 12.2 impact due to isrs rulings . these impacts were only partly offset by an increase of $ 32.2 relating to the rate design changes at spire missouri , an increase in isrs of $ 8.7 , a $ 4.6 increase relating to spire alabama 's rse renewal and giveback , and $ 2.7 attributable to customer growth . contribution margin – gas utility contribution margin was $ 967.1 for fiscal 2019 , a $ 19.6 increase over the same period last year . the increase was attributable to the following factors : replace_table_token_12_th the increase was primarily attributable to the $ 32.2 increase resulting from the 2018 missouri rate cases resets . contribution margin also benefited from $ 8.7 higher isrs charges , $ 5.1 due to volumes and colder weather in the current year ( net of weather mitigation ) , a $ 4.6 increase relating to spire alabama 's rse renewal and giveback , and $ 2.7 attributable to customer growth . these positive impacts were only partly offset by rate case tcja customer givebacks totaling $ 24.3 from both spire missouri and spire alabama , and $ 12.2 relating to isrs rulings against spire missouri . 36 operating expenses – gas utility o & m expenses for the twelve months ended september 30 , 2019 decreased $ 8.0 from last year . removing last year 's $ 38.4 of missouri rate case write-offs , and the $ 19.6 net year-over-year increase due to the transfer of mix of service and non-service postretirement benefits costs to other income and expense , o & m increased $ 10.8. of this increase , $ 9 . 0 relates to higher employee benefits and energy efficiency costs that resulted from the 2018 missouri rate case s . depreciation and amortization expenses for the twelve months ended september 30 , 2019 increased $ 12.4 from the same period last year principally the result of continued infrastructure capital spending , with $ 8.7 of the increase attributable to spire missouri and $ 3.0 attributable to spire alabama . gas marketing operating revenues – gas marketing operating revenue for the year ended september 30 , 2019 increased $ 12.1 from the prior year . the variance in revenues reflects the effect of a $ 9.3 favorable mark-to-market adjustment on derivatives combined with higher total volumes , partly offset by the impact of marginally lower general pricing levels . average commodity pricing for the year ended september 30 , 2019 was approximately $ 2.670/mmbtu versus approximately $ 2.681/mmbtu for fiscal 2018 , a decrease of $ 0.011/mmbtu . contribution margin – gas marketing contribution margin was $ 35.6 for fiscal 2019 , a $ 5.7 decrease compared to the same period last year . this reflects geographic expansion that created additional opportunities to optimize the segment 's supply , transportation and storage portfolio that was more than offset by a return to more normal market conditions , reflected in the narrowed basis differentials in the current year . other other operating revenue increased $ 5.0 for the year ended september 30 , 2019 compared to 2018 , driven principally by gas storage revenues and slightly higher reinsurance premiums . other operating expenses were $ 1.3 higher than the prior year primarily due
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash and cash equivalents bank deposits were used to support working capital needs of the business . spire had no temporary cash investments as of september 30 , 2019 or 2018. due to lower yields available to spire on short-term investments , the company elected to provide all of spire missouri 's and spire alabama 's short-term funding through intercompany lending during the past fiscal year . short-term debt the utilities ' short-term borrowing requirements typically peak during the colder months , while most of the company 's other needs are less seasonal . these short-term cash requirements can be met through the sale of commercial paper or through the use of a revolving credit facility . for information about these resources , see note 7 , notes payable and credit agreements , of the notes to financial statements in item 8 and “ interest rate risk ” under “ market risk ” below . long-term debt and equity at september 30 , 2019 , including the current portion but excluding unamortized discounts and debt issuance costs , spire had long-term debt totaling $ 2,137.0 , of which $ 930.0 was issued by spire missouri , $ 415.0 was issued by spire alabama , and $ 102.0 was issued by other subsidiaries . for more information about long-term debt , see note 6 of the notes to financial statements in item 8 and “ interest rate risk ” under “ market risk ” below .
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supply of building products osb is a commodity product , and it is , along with all of our products , subject to competition from manufacturers worldwide . product supply is influenced primarily by fluctuations in available manufacturing capacity and imports . according to fea ( forest economic advisors , llc ) , total north american osb annual production capacity is projected to increase by approximately 1.6 billion square feet in the period from 2015 to 2018 while plywood production capacity is projected to increase by 0.2 billion square feet for the same period . according to fea , osb accounted for approximately 66 % of north american structural panel production capacity in 2014 , with plywood accounting for the remainder . putting demand and supply together as noted above , demand for building products is influenced by the general economy , demographics and need for housing . in the case of osb , generally , lower demand coupled with higher production capacity will result in lower pricing . the chart below , as calculated by fea ( as of december 2014 ) , shows the demand capacity ratio ( demand divided by supply ) for osb in 2010 through 2014 as well as fea 's forecast through 2018 based upon estimated future demand and supply . 21 product pricing . historical prices for our products have been volatile , and we , like other participants in the building products industry , have limited influence over the timing and extent of price changes for our products . the estimated average north central wholesale price for osb ( per thousand square feet 7/16 ” basis ) from 2007 through 2014 , as published by random lengths , an industry publication , is presented below . fea 's forecast ( as of december 2014 ) for average north central wholesale pricing for osb ( per thousand square feet 7/16 ” basis ) through 2018 is also shown . 22 critical accounting policies and significant estimates a discussion of our significant accounting policies and significant accounting estimates and judgments is presented in note 1 of the notes to the financial statements in item 8 of this report . throughout the preparation of the financial statements , we employ significant judgments in the application of accounting principles and methods . these judgments are primarily related to the assumptions used to arrive at various estimates . for 2014 , these significant accounting estimates and judgments include : legal contingencies . our estimates of loss contingencies for legal proceedings are based on various judgments and assumptions regarding the potential resolution or disposition of the underlying claims and associated costs . in making judgments and assumptions regarding legal contingencies for ongoing class action settlements , we consider , among other things , discernible trends in the rate of claims asserted and related damage estimates and information obtained through consultation with statisticians and economists , including statistical analysis of potential outcomes based on experience to date and the experience of third parties who have been subject to product-related claims judged to be comparable . due to the numerous variables associated with these judgments and assumptions , both the precision and reliability of the resulting estimates of the related loss contingencies are subject to substantial uncertainties . we regularly monitor our estimated exposure to these contingencies and , as additional information becomes known , may change our estimates significantly . environmental contingencies . our estimates of loss contingencies for environmental matters are based on various judgments and assumptions . these estimates typically reflect judgments and assumptions relating to the probable nature , magnitude and timing of required investigation , remediation and or monitoring activities and the probable cost of these activities , and in some cases reflect judgments and assumptions relating to the obligation or willingness and ability of third parties to bear a proportionate or allocated share of the cost of these activities , including third parties who purchased assets from us subject to environmental liabilities . we consider the ability of third parties to pay their apportioned cost when developing our estimates . in making these judgments and assumptions related to the development of our loss contingencies , we consider , among other things , the activity to date at particular sites , information obtained through consultation with applicable regulatory authorities and third-party consultants and contractors and our historical experience at other sites that are judged to be comparable . due to the numerous variables associated with these judgments and assumptions , and the effects of changes in governmental regulation and environmental technologies , both the precision and reliability of the resulting estimates of the related contingencies are subject to substantial uncertainties . we regularly monitor our estimated exposure to environmental loss contingencies and , as additional information becomes known , may change our estimates significantly . at december 31 , 2014 , we excluded from our estimates approximately $ 2.3 million of potential environmental liabilities that we estimate will be allocated to third parties pursuant to existing and anticipated future cost sharing arrangements . impairment of long-lived assets . we review the long-lived assets held and used by us ( primarily property , plant and equipment and timber and timberlands ) for impairment when events or changes in circumstances indicate that the carrying amount of assets may not be recoverable . we consider the necessity of undertaking such a review at least quarterly , and also when certain events or changes in circumstances occur . story_separator_special_tag sales prices decreased for 2014 as compared to 2013 for our commodity osb products as discussed in the osb segment above . volumes of commodity osb were lower as compared to 2013 due to increases in siding volume , which reduced the production capacity available for osb , and log outages . overall , the reduction in operating results for our siding segment for 2014 compared to 2013 was due to decreased osb volume , higher raw material ( primarily logs ) and transportation costs which were partially offset by higher siding sales . 2013 compared to 2012 siding sales volumes increased in our smartside ® siding line due to continued penetration in several key focus markets including retail , repair and remodel markets , sheds and increased housing demand . sales prices in our smartside siding product as compared to the prior year increased due primarily to changes in product mix as well as price increases implemented to offset increases in raw material costs . sales volumes declined slightly in our canexel siding lines due to lower demand in canada and international sales , primarily europe . sales prices were down slightly between years due to the impact of the fluctuations in the canadian dollar related to the u.s dollar . sales prices in the canadian dollar increased by 3 % between years . sales prices increased for our commodity osb products as described in the discussion of our osb segment above . the increase in selling price favorably impacted operating results and adjusted ebitda from continuing operations by approximately $ 3 million for 2013 as compared to 2012 . 31 overall , the increases in operating results for our siding segment for 2013 as compared to 2012 were due to increased osb pricing and higher sales volumes in our smartside ® siding line . engineered wood products our ewp segment manufactures and distributes lvl , i-joists , lsl and other related products . this segment also includes the sale of i-joist and lvl products produced by our joint venture with resolute forest products and under a sales and marketing arrangement with murphy plywood . included in this segment is a plywood mill , which primarily produces plywood as a by-product from the lvl production process . also a minor amount of osb are produced by our lvl facility . our strategy is to strengthen our brand name recognition in the ewp market by enhancing our product mix and quality , providing superior technical support to our customers and leveraging our sales and marketing relationships to cross-sell our ewp products . additionally , we are seeking to drive costs down by rationalizing our production capacity across geographic areas and improving operating efficiencies in our manufacturing facilities . segment sales , operating ( losses ) and adjusted ebitda from continuing operations for this segment were as follows : replace_table_token_12_th sales in this segment by product line were as follows : replace_table_token_13_th percent changes in average sales prices and unit shipments for the year ended 2014 compared to 2013 and 2013 compared to 2012 are as follows : replace_table_token_14_th 2014 compared to 2013 sales volumes increased in lvl/lsl and i-joist due to improved market demand due to increased housing starts . net average selling prices increased due to implemented price increases . 2013 compared to 2012 32 sales volumes increased in lvl/lsl and i-joist due to increased demand in the u.s. housing market with offsetting reductions in exports . net average selling prices increased due to price increases implemented to offset higher raw material costs . the results of operations were lower for 2013 as compared to 2012 due to increases in raw material costs , primarily osb and lumber , which were partially offset by increases in sales prices . south america our south america segment manufactures and distributes osb structural panel and siding products in south america . we operate in two geographic areas of south america , chile and brazil . replace_table_token_15_th sales in this segment by production location were as follows : replace_table_token_16_th percent changes in average sales prices and unit shipments for the year ended 2014 compared to 2013 and 2013 compared to 2012 are as follows : replace_table_token_17_th 2014 compared to 2013 for our chilean operations , sales volumes were lower due to issues related to a political transition in chile which has slowed housing activity . we are also seeing increased imports . sales volumes in brazil were slightly higher in 2014 compared to 2013 due to increased export sales . sales prices in chile declined for 2014 as compared to 2013 due to pricing pressure from increased imports and the impact of the fluctuations in the chilean peso relative to the u.s. dollar as a majority of these sales are in local markets . sales prices in brazil increased slightly for 2014 as compared to 2013 due to the impact of the fluctuations in the brazilian real relative to the u.s. dollar as a majority of these sales are in local markets . local currency selling prices in chile were 2 % lower in 2014 as compared to 2013 and local currency selling prices in brazil were about flat with the prior year . 2013 compared to 2012 in our chilean operations , sales volumes decreased due to increased imports from north america . sales volumes in brazil decreased due to reduced production related to maintenance work completed on its press during the year . 33 sales prices in chile increased in 2013 , as compared to 2012 due to price increases implemented . sales prices in brazil increased slightly due to the impact of the fluctuations in the brazilian real related to the u.s. dollar as a majority of these sales are in local markets . local currency selling prices in chile increased by ( 2 ) % and local currency selling prices in brazil increased by ( 1 ) % in 2013 as compared to 2012. other our other products category
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources overview our principal sources of liquidity are existing cash and investment balances , cash generated by our operations and our ability to borrow under such credit facilities as we may have in effect from time to time . we may also from time to time issue and sell equity , debt or hybrid securities or engage in other capital market transactions . our principal uses of liquidity are paying the costs and expenses associated with our operations , servicing outstanding indebtedness and making capital expenditures . we may also from time to time prepay or repurchase outstanding indebtedness , acquire assets or businesses that are complementary to our operations . any such repurchases may be commenced , suspended , discontinued or resumed , and the method or methods of effecting any such repurchases may be changed , at any time or from time to time without prior notice . operating activities during 2014 , we used $ 52.9 million of cash for operations as compared to generating $ 242.5 million of cash from operations in 2013 . this change reflects decreased results of operations for 2014. our trade receivables increased $ 26.9 million during 2014. our trade accounts payable decreased by $ 2.8 million during 2014 primarily due to the decreases in raw material inventory and our salary and wages payable decreasing by $ 10.9 million due to timing of payroll disbursements as well aslower management accruals .
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the initial base period included $ 4.7 million over two years and covered preclinical research and continued development of cytori 's celution® system to improve cell processing . the additional contract options , if fully executed , could cover our clinical development through fda approval under a device-based pma regulatory pathway . the cost-plus-fixed-fee contract is valued at up to $ 106 million , with a guaranteed two-year base period of approximately $ 4.7 million . we submitted reports to barda in late 2013 detailing the completion of the objectives in the initial contract . an in-process review meeting in the first half of 2014 confirmed completion of the proof of concept phase . in august and december , 2014 , barda awarded to us contract options of $ 14 million . the options allow for continuation of research , regulatory , clinical , and other activities required for approval and completion of a pilot clinical trial using cytori cell therapy ( dcct-10 ) for the treatment of thermal burns combined with radiation injury . the award for conducting the pilot trial , approximately $ 8 million , would follow fda approval of the trial protocol and associated documentation . once the pilot trial is analyzed , the final phase would include research , regulatory , and clinical activities necessary to achieve regulatory clearances to optimize a treatment for combined injury involving thermal burn and radiation exposure . a pivotal clinical trial of the use of the cytori cell therapy ( dcct-10 ) for thermal burn injury will be the primary basis of an fda approval . the total award is intended to support all clinical , preclinical , regulatory , and technology development activities needed to complete the fda approval process for use in thermal burn injury under a device-based pma regulatory pathway . results of operations product revenues product revenues consisted of revenues primarily from our celution® and stemsource® cell banks . the following table summarizes the components for the years ended december 31 , 2014 , 2013 and 2012 : replace_table_token_3_th a majority of our product revenue in 2014 was derived from japan . with two new regenerative medicine laws in japan going into effect in november 2014 that removed regulatory uncertainties and provided a clear path for us to offer cytori cell therapy in japan , we expect continued demand from researchers at academic hospitals seeking to perform investigator-initiated and funded studies . we experienced a decrease in product revenue during the year ended december 31 , 2014 as compared to the same period in 2013 , primarily due to decreased activities with our licensee and distributor lorem vascular , who purchased the initial stocking order of approximately $ 1.8m in late 2013 that did not recur in 2014 , decreased revenue in europe of $ 0.7 million , offset by increased revenues in japan of approximately $ 1.0 million . revenue deferred in the years ended december 31 , 2014 , and 2013 was $ 1.4 million , and $ 3.6 million , respectively . there was no comparable revenue deferral in the year ended december 31 , 2012. the future : we expect to continue to generate product revenues from a mix of celution® and stemsource® system and consumables sales . we will sell the products to a diverse group of customers in europe , asia and north america , who may apply the products towards reconstructive surgery , soft tissue repair , research , aesthetics , and cell and tissue banking as approved in each country . additionally , as a result of class i device clearance for celution® and a number of our other products in japan , we anticipate selling these products to researchers at academic hospitals seeking to perform investigator-initiated and funded studies using cytori 's cell therapy . as a result of the sale of our puregraft® product line discussed in note 5 of the consolidated condensed financial statements , we do not expect significant revenues from that product line in the foreseeable future . 30 cost of product revenues cost of product revenues relate primarily to celution® system products and stemsource® cell banks and includes material , manufacturing labor , and overhead costs . the following table summarizes the components of our cost of revenues for the years ended december 31 , 2014 , 2013 and 2012 : replace_table_token_4_th cost of product revenues as a percentage of product revenues was 59 % , 48 % and 46 % for the years ended december 31 , 2014 , 2013 and 2012 , respectively . fluctuation in this percentage is to be expected due to the product mix , distributor and direct sales mix , geographic mix and allocation of overhead . in 2014 , we also experienced the impact of the weakness of the japanese yen , which resulted in a decrease to our gross profit margin . the future : we expect to continue to see variation in our gross profit margin as the product mix comprising revenues fluctuates . development revenues the following table summarizes the components of our development revenues for the years ended december 31 , 2014 , 2013 and 2012 : replace_table_token_5_th during the year ended december 31 , 2014 , we incurred $ 2,461,000 in qualified expenditures , and recognized a total of $ 2,645,000 in revenues , which included allowable fees as well as cost reimbursements . during the year ended december 31 , 2013 , we incurred $ 3,053,000 in qualified expenditures , and recognized a total of $ 3,257,000 in revenues , which included allowable fees as well as cost reimbursements . during the year ended december 31 , 2012 , we incurred $ 331,000 in qualified expenditures , and recognized a total of $ 355,000 in revenues , which included allowable fees as well as cost reimbursements . story_separator_special_tag · in may 2014 , we entered into subscription agreements with certain institutional investors pursuant to which we sold a total of 4,048,584 units , with each unit consisting of one share of common stock and one warrant to purchase one share of common stock at a purchase price of $ 2.47 per unit , in a registered direct offering . each warrant had an exercise price of $ 3.00 per share , was exercisable immediately after issuance and expires five years from the date of issuance . the transaction was completed on june 4 , 2014 raising approximately $ 10,000,000 in gross proceeds before deducting any offering expenses or fees payable by us . under the terms of our placement agent agreement , we granted wbb securities , llc warrants to purchase 202,429 shares of common stock . the placement agent warrants have the same terms as the warrants issued to the purchasers in the offering , except that such warrants have an exercise price of $ 3.09 . 37 · in september 2014 , we and 13 holders of warrants dated june 4 , 2014 to purchase a total of 4,032,389 shares of our common stock agreed to amend the warrants in order to reduce the exercise price from $ 3.00 per share to $ 1.00 per share and change the expiration date from june 4 , 2019 to september 10 , 2014. we received proceeds of approximately $ 4,066,000 from the exercise of the warrants . in addition , pursuant to the terms of the amendment , upon each holder 's exercise of all warrants for cash prior to the amended expiration date , we issued additional warrants for the same number of common shares to the holders . the additional warrants have an exercise price of $ 2.00 per share , and are exercisable on the date that is six months and one day from the date of issuance and expire five years from the date of issuance . for those investors participating in the october 2014 issuance of series a 3.6 % convertible preferred stock , we agreed to reduce the exercise price of 3,384,601 warrants from $ 2.00 per share to $ 0.5771 per share , conditioned upon shareholder approval which was obtained in january 2015 . · in september 2014 , we entered into a 2 nd amendment to the loan agreement with the lenders pursuant to the amended loan agreement , under which we were provided a conditional waiver of principal payments subject to meeting certain capital raise requirements , which we achieved in october . the waiver of principal payments continues from november 1 , 2014 through april 1 , 2015 and thereafter we are required to make payments of principal and accrued interest in equal monthly installments of $ 1.0 million , sufficient to amortize the term loans through the maturity date . · in october , 2014 , we entered into a securities purchase agreement with certain institutional investors pursuant to which we sold a total of 13,500 units for a purchase price of $ 1,000 per unit , with each unit consisting of one share of our series a 3.6 % convertible preferred stock , which is convertible into shares of our common stock with a conversion price of $ 0.52 , and warrants to purchase up to a number of shares of common stock equal to 100 % of the conversion shares under the shares of preferred stock , in a registered direct offering . each warrant has an exercise price of $ 0.5771 per share , is exercisable six months after the date of issuance and expires five years from the date on which it is initially exercisable . the preferred stock and the warrants were immediately separable and were issued separately . as of december 31 , 2014 , 8,189 units had been converted into 15,747,000 shares of common stock . the following summarizes our contractual obligations and other commitments at december 31 , 2014 , and the effect such obligations could have on our liquidity and cash flow in future periods : replace_table_token_14_th * we have various payment options which could result in the acceleration or deferral of the joint venture purchase obligation . see note 4 to the consolidated condensed financial statements for discussion of our acquisition of olympus ' interest in the joint venture . net cash used in or provided by operating , investing and financing activities for the years ended december 31 , 2014 , 2013 and 2012 is summarized as follows : replace_table_token_15_th 38 operating activities operating activities , inclusive of research and development , sales and marketing , and general and administrative efforts , offset in part by product sales , generated a $ 37,368,000 net loss for the year ended december 31 , 2014. the operating cash impact of this loss was $ 30,330,000 , after adjusting for non-cash share-based compensation , other adjustments for material non-cash activities , such as depreciation , amortization , change in fair value of warrants , and changes in working capital due to timing of product shipments ( accounts receivable ) and payment of liabilities . overall , our operational cash use decreased as compared to same period in 2013 , due primarily to an increase in cash collections from accounts receivable , offset by increased in payments of accounts payable and accrued liabilities . operating activities , inclusive of research and development , sales and marketing , and general and administrative efforts , offset in part by product sales , generated a $ 26,177,000 net loss for the year ended december 31 , 2013. the operating cash impact of this loss was $ 34,563,000 , after adjusting for non-cash share-based compensation , other adjustments for material non-cash activities , such as depreciation , amortization , change in fair value of option liabilities and warrants , gain on sale of assets and acquisition of joint venture , and changes in working
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources short-term and long-term liquidity the following is a summary of our key liquidity measures at december 31 , 2014 and 2013 : replace_table_token_13_th we incurred net losses of $ 37,368,000 , $ 26,177,000 and $ 32,279,000 for the years ended december 31 , 2014 , 2013 and 2012 , respectively . we have an accumulated deficit of $ 338,273,000 as of december 31 , 2014. additionally , we have used net cash of $ 30,330,000 , $ 34,563,000 and $ 32,193,000 to fund our operating activities for years ended december 31 , 2014 , 2013 and 2012 , respectively . at december 31 , 2014 , the current portion of long-term debt obligations is $ 7.4 million and the joint venture purchase obligation is $ 3.0 million . the combination of these facts and the balance of cash and cash equivalents at december 31 , 2014 raises substantial doubt as to the company 's ability to continue as a going concern . to date , these operating losses have been funded primarily from outside sources of invested capital and gross profits . we have had , and we will likely continue to have , an ongoing need to raise additional cash from outside sources to fund our future operations . however , our ability to raise capital was adversely affected once fda put a hold on our athena trials in mid-2014 , which had an adverse impact to stock price performance and our corresponding ability to restructure our debt . if we are unsuccessful in our efforts to raise outside capital in the near term , we will be required to significantly reduce our research , development , and administrative operations , including reduction of our employee base , in order to offset the lack of available funding . we are pursuing financing opportunities in both the private and public debt and equity markets as well as through strategic corporate partnerships . we have an established history of raising capital through these platforms , and we are currently involved in negotiations with multiple parties . our efforts in 2014 to raise capital took longer than we initially anticipated .
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the company is committed to the safe and reliable delivery of natural gas to its customers . since 1991 , the company has placed an emphasis on the modernization of its distribution system through the renewal and replacement of its cast iron and bare steel natural gas distribution pipelines . with recent regulatory actions placing a greater emphasis on pipeline safety , the company continues to focus its efforts on completing its renewal and replacement program . management anticipates replacing all remaining cast iron and bare steel pipe within the next two years and expects to continue its renewal program with plans to replace first generation pre-1973 plastic pipe . the company is also dedicated to the safeguarding of its information technology systems . these systems contain confidential customer , vendor and employee information as well as important financial data . there is risk associated with the unauthorized access of this information with a malicious intent to corrupt data , cause operational disruptions , or compromise information . management believes it has taken reasonable security measures to protect these systems from cyber security attacks and other types of breaches ; however , there can be no guarantee that a breach will not occur . in the event of a breach , the company will execute its security incident response plan to assist with managing the incident . the company also maintains cyber-insurance coverage to mitigate financial implications resulting from a breach of confidential information . over 97 % of the company 's revenues are derived from the sale and delivery of natural gas to roanoke gas customers . the scc authorizes the rates and fees the company charges its customers for these services . these rates are designed to provide the company with the opportunity to recover its gas and non-gas expenses and to earn a reasonable rate of return for shareholders based on normal weather . normal weather refers to the average number of heating degree days ( an industry measure by which the average daily temperature falls below 65 degrees fahrenheit ) over the previous 30-year period . as the company 's business is seasonal in nature , volatility in winter weather and the commodity price of natural gas , can impact the effectiveness of the company 's rates in recovering its costs and providing a reasonable return for its shareholders . in order to mitigate the effect of weather variations , the company has certain approved rate mechanisms in place that help provide stability in earnings , adjust for volatility in the price of natural gas and provide a return on increased infrastructure investment . these mechanisms include a purchased gas adjustment factor ( pga ) , weather normalization adjustment factor ( wna ) , inventory carrying cost revenue and a steps to advance virginia energy ( save ) adjustment rider . the company 's approved billing rates include a component designed to allow for the recovery of the cost of natural gas used by its customers . the cost of natural gas is considered a pass-through cost and is independent of the non-gas rates of the company . this rate component , referred to as the pga clause , allows the company to pass along to its customers increases and decreases in natural gas costs incurred by its regulated operations . on a quarterly basis , the company files a pga rate adjustment request with the scc to adjust the gas cost component of its rates up or down depending on projected price and activity . once administrative approval is received , the company adjusts the gas cost component of its rates to reflect the approved amount . as actual costs will differ from the projections used in establishing the pga rate , the company will either over-recover or under-recover its actual gas costs during the period . the difference between actual costs incurred and costs recovered through the application of the pga is recorded as a regulatory asset or liability . at the end of the annual deferral period , the balance is amortized over an ensuing 12-month period as amounts are reflected in customer billings . the wna reduces the volatility in earnings due to the variability in temperatures during the heating season . the wna is based on a weather measurement band around the most recent 30-year temperature average . the wna provides the company with a level of earnings protection when weather is warmer than normal and provides its customers with 14 price protection when the weather is colder than normal . prior to april 2014 , the wna provided a weather band of 3 % above and below normal , whereby the company would bill its customers for the lost margin ( excluding gas costs ) for the impact of weather that was more than 3 % warmer than normal or refund customers the excess margin earned for weather that was more than 3 % colder than normal . effective with the wna year that began april 2014 , the 3 % weather band was removed and the wna is now based strictly on temperature variations from normal . for the fiscal year ended september 30 , 2015 , the company recorded a $ 609,000 reduction in revenue for weather that was approximately 6.5 % colder than normal . during the fiscal year ended september 30 , 2014 , the company recorded a reduction in revenue of $ 563,000 to reflect the wna adjustment for weather that was 8.8 % colder than normal . if the wna weather band had been 0 % for the entire fiscal 2014 instead of 3 % for the period october 1 , 2013 through march 31 , 2014 , revenue would have been adjusted down by $ 814,000. no revenue adjustment for wna was made for fiscal 2013 as the number of heating degree days fell within the 3 % band then in effect . story_separator_special_tag other expense other expense , net , increased by $ 146,770 primarily due to the absence of interest income related to the angd note which was paid off in fiscal 2013 combined with a greater level of corporate charitable giving and increased scc pipeline assessments . interest expense total interest expense remained virtually unchanged from fiscal 2013 as the company benefited in september from lower interest expense due to its debt refinancing which offset the increased interest incurred under the line-of-credit . income taxes income tax expense increased by $ 294,753 on higher pre-tax earnings . the effective tax rate for fiscal 2014 was 38.4 % compared to 38.3 % for 2013. net income and dividends net income for fiscal 2014 was $ 4,708,440 compared to $ 4,262,052 for fiscal 2013. basic and diluted earnings per share were $ 1.00 in fiscal 2014 compared to $ 0.91 in fiscal 2013. dividends declared per share of common stock were $ 0.74 in fiscal 2014 compared to $ 1.72 in fiscal 2013 , which included the one-time special dividend of $ 1.00. capital resources and liquidity due to the capital intensive nature of the utility business , as well as the related weather sensitivity , the company 's primary capital needs are for the funding of its continuing construction program , the seasonal funding of its natural gas inventories and accounts receivables and payment of dividends . to meet these needs , the company relies on its operating cash flows , line-of-credit agreement , long-term debt , and to a lesser extent , capital raised through the company 's stock plans . cash and cash equivalents increased by $ 135,477 in fiscal 2015 compared to decreases of $ 1,996,467 in fiscal 2014 and $ 6,063,647 in fiscal 2013. the following table summarizes the categories of sources and uses of cash : cash flow summary replace_table_token_12_th cash flows provided by operating activities : the seasonal nature of the natural gas business causes operating cash flows to fluctuate significantly during the year as well as from year to year . factors , including weather , energy prices , natural gas storage levels and customer collections , all contribute to working capital levels and related cash flows . generally , operating cash flows are positive during the second and third quarters as a combination of earnings , declining storage gas levels and collections on customer accounts all contribute to higher cash levels . during the first and fourth quarters , operating cash flows generally decrease due to the combination of increases in natural gas storage levels and rising customer receivable balances . 20 cash provided by operating activities was $ 16,761,000 in fiscal 2015 , $ 6,840,000 in fiscal 2014 and $ 10,037,000 in fiscal 2013. cash provided by operating activities increased by nearly $ 10,000,000 from last year primarily as a result of lower natural gas commodity prices and the extension of 50 % bonus depreciation for tax purposes for calendar 2014. the gas cost component of the company 's natural gas billing rates for the high volume winter period from january through march were derived based on natural gas futures pricing in early december 2014 when expectations were that prices would rise slightly during the period . instead , the commodity price of gas declined by nearly $ 1.50 per decatherm from december 2014 until early february 2015 , at which time the price leveled off . as a result , the company was over-recovered on gas costs for billings rendered during this time period . the company also benefited from the decline in natural gas prices as natural gas purchased for storage was at lower rates than in fiscal 2014. the company purchases natural gas for storage purposes during the spring and summer months for use during the fall and winter heating season . as natural gas prices remained at lower levels during the spring and summer , the price of gas in storage declined from $ 4.71 per decatherm at september 30 , 2014 to $ 3.38 at september 30 , 2015 , which resulted in an overall decline in storage inventory of $ 3,242,000. in addition , the extension of bonus depreciation to the end of calendar 2014 accounted for most of the increase in the deferred tax liability . operating cash flow also increased due to higher net income and depreciation amounts . the cash windfall on the over-recovery of gas costs will be short-lived as the excess collected will be refunded to customers in 2016. in addition , deferred tax liabilities related to accelerated and bonus depreciation on the company 's utility plant at september 30 , 2015 will begin to reverse in 2016 or later , resulting in additional cash outflows for payment of the taxes . conversely , during fiscal 2014 storage inventory balances increased by more than $ 1,000,000 and the company went from an over-collected position to an under-collected position , resulting in a $ 1,208,000 use of operating cash . story_separator_special_tag size= `` 2 `` style= `` font-family : times new roman `` > ( 3 ) recoverable through the pga process . ( 4 ) volumetric obligation is for the purchase of contracted decatherms of natural gas at market prices in effect at the time of purchase . unable to estimate related payment obligation until time of purchase . see note 9 to the consolidated financial statements . ( 5 ) accrued interest on line-of-credit balance at september 30 , 2015 , including minimum facility fee on unused line-of-credit . see note 3 to the consolidated financial statements . ( 6 ) semi-annual interest payment on 20-year $ 30.5 million note payable september 18 , 2034. see note 4 to the consolidated financial statements . ( 7 ) estimated minimum funding assuming application of credit balances in plan to offset funding . minimum funding requirements beyond five years is not available . see note 6 to the consolidated financial statements . (
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows used in investing activities : investing activities primarily consist of expenditures under the company 's construction program , which involves a combination of replacing aging bare steel and cast iron pipe with new plastic or coated steel pipe , making improvements to the lng plant and expansion of its natural gas system to meet the demands of customer growth . the company 's expenditures related to its pipeline renewal program and other system and infrastructure improvements and expansion have continued at elevated levels with total expenditures of $ 13,800,000 in fiscal 2015 , $ 14,700,000 in fiscal 2014 and approximately $ 10,000,000 in fiscal 2013. the company renewed 10 miles of bare steel and cast iron natural gas distribution main and replaced 594 services in fiscal 2015. this compares to 13.6 miles of main and 942 services in fiscal 2014 and 13 miles of main and 1,064 services in fiscal 2013. total costs related to the renewal program continue to increase as the less complex and highly concentrated customer areas of the company 's natural gas distribution system have been completed , leaving the more difficult sections to be done . completion of the remaining pipeline replacement will more than likely be at a higher cost . the company 's capital expenditures also included costs to extend mains and services to 609 new customers in fiscal 2015 compared to 673 in fiscal 2014 and 468 in fiscal 2013. in addition , the company completed a significant main relocation and replacement of the compressor at the lng plant in fiscal 2015. rgc resources is committed to the safe and reliable delivery of natural gas to its customers and , as a result , plans to commit the necessary resources to its pipeline renewal program with an expectation to replace all remaining cast iron and bare steel pipe within the next two years . as a reflection of this commitment , the company 's capital budget for next year is currently estimated to be in excess of fiscal 2015 with the continuation of the pipeline replacement program and the replacement of two additional transfer stations .
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as used in this `` management 's discussion and analysis of financial condition and results of operation , `` except where the context otherwise requires , the term `` we , `` `` us , `` `` our , `` or `` tiger x , `` refers to the business of tiger x medical , inc. overview tiger x medical , inc. ( `` tiger x `` or the `` company `` ) , formerly known as cardo medical , inc. , previously operated as an orthopedic medical device company specializing in designing , developing and marketing high performance reconstructive joint devices and spinal surgical devices . as discussed below , in 2011 we entered into an asset purchase agreement to sell substantially all of our assets in the reconstructive division to arthrex , inc. ( `` arthrex `` ) . additionally , we completed the sale of substantially all of the assets in the spine division in 2011. our continuing operations include the collection and management of our royalty income earned in connection with the asset purchase agreement with arthrex , as well as continuing to promote our former products sold to arthrex through participation in mobile teaching labs , seminars and live surgery and seek a joint venture partner or buyer for the remaining intellectual property owned by the company . the company will also be evaluating future investment opportunities and uses for its cash . we are headquartered in los angeles , california . our common stock is quoted on the national association of securities dealers , inc. 's , over-the-counter bulletin board , or the otc bulletin board with a trading symbol of cdom.ob . critical accounting policies and estimates our significant accounting policies are more fully described in the notes to our consolidated financial statements . those material accounting estimates that we believe are the most critical to an investor 's understanding of our financial results and condition are discussed immediately below and are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management to determine the appropriate assumptions to be used in the determination of certain estimates . use of estimates financial statements prepared in accordance with united states generally accepted accounting principles ( `` u.s. gaap `` ) require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . among other things , management makes estimates relating to allowances for doubtful accounts , net realizable value of assets , share- based payment , and deferred income tax assets . actual results could differ from those estimates . 11 revenue recognition the company 's revenue consists of royalty income from arthrex pursuant to the arthrex asset purchase agreement . royalty income is recognized as the amount becomes known and collectability is reasonably assured . income taxes deferred income tax assets and liabilities are recognized to reflect the estimated future tax effects , calculated at currently effective tax rates , of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements . a valuation allowance related to a deferred income tax asset is recorded when it is more likely than not that some portion of the deferred income tax asset will not be realized . deferred income tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates on the date of enactment . the company recognizes all material tax positions , including all significant uncertain tax positions , in which it is more likely than not that the position will be sustained based on its technical merits and if challenged by the relevant taxing authorities . at each balance sheet date , unresolved uncertain tax positions are reassessed to determine whether subsequent developments require a change in the amount of recognized tax benefit . recent accounting pronouncements in may 2014 , the financial accounting standards board ( `` fasb `` ) issued accounting standards update ( `` asu `` ) 2014-09 , revenue from contracts with customers ( topic 606 ) . asu 2014-09 creates a new topic in the asc topic 606 and establishes a new control-based revenue recognition model , changes the basis for deciding when revenue is recognized over time or at a point in time , provides new and more detailed guidance on specific topics , and expands and improves disclosures about revenue . in addition , asu 2014-09 adds a new subtopic to the codification , asc 340-40 , other assets and deferred costs : contracts with customers , to provide guidance on costs related to obtaining a contract with a customer and costs incurred in fulfilling a contract with a customer that are not in the scope of another asc topic . the guidance in asu 2014-09 is effective for public entities for annual reporting periods beginning after december 15 , 2016 , including interim periods therein . early application is not permitted . management is in the process of assessing the impact of asu 2014-09 on the company 's financial statements . results of operations and financial condition for the year ended december 31 , 2015 as compared to the year ended december 31 , 2014 the following are the consolidated results of our operations for the year ended december 31 , 2015 compared to the year ended december 31 , 2014. replace_table_token_2_th 12 royalty income royalty income amounted to $ 517,000 for the year ended december 31 , 2015 compared with $ 427,000 for 2014. revenues represented royalties received from arthrex in connection with the arthrex asset purchase agreement . the increase during 2015 is the result of arthrex 's increased sales of the acquired product line . until we find a joint venture partner or buyer for our remaining intellectual property story_separator_special_tag as used in this `` management 's discussion and analysis of financial condition and results of operation , `` except where the context otherwise requires , the term `` we , `` `` us , `` `` our , `` or `` tiger x , `` refers to the business of tiger x medical , inc. overview tiger x medical , inc. ( `` tiger x `` or the `` company `` ) , formerly known as cardo medical , inc. , previously operated as an orthopedic medical device company specializing in designing , developing and marketing high performance reconstructive joint devices and spinal surgical devices . as discussed below , in 2011 we entered into an asset purchase agreement to sell substantially all of our assets in the reconstructive division to arthrex , inc. ( `` arthrex `` ) . additionally , we completed the sale of substantially all of the assets in the spine division in 2011. our continuing operations include the collection and management of our royalty income earned in connection with the asset purchase agreement with arthrex , as well as continuing to promote our former products sold to arthrex through participation in mobile teaching labs , seminars and live surgery and seek a joint venture partner or buyer for the remaining intellectual property owned by the company . the company will also be evaluating future investment opportunities and uses for its cash . we are headquartered in los angeles , california . our common stock is quoted on the national association of securities dealers , inc. 's , over-the-counter bulletin board , or the otc bulletin board with a trading symbol of cdom.ob . critical accounting policies and estimates our significant accounting policies are more fully described in the notes to our consolidated financial statements . those material accounting estimates that we believe are the most critical to an investor 's understanding of our financial results and condition are discussed immediately below and are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management to determine the appropriate assumptions to be used in the determination of certain estimates . use of estimates financial statements prepared in accordance with united states generally accepted accounting principles ( `` u.s. gaap `` ) require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . among other things , management makes estimates relating to allowances for doubtful accounts , net realizable value of assets , share- based payment , and deferred income tax assets . actual results could differ from those estimates . 11 revenue recognition the company 's revenue consists of royalty income from arthrex pursuant to the arthrex asset purchase agreement . royalty income is recognized as the amount becomes known and collectability is reasonably assured . income taxes deferred income tax assets and liabilities are recognized to reflect the estimated future tax effects , calculated at currently effective tax rates , of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements . a valuation allowance related to a deferred income tax asset is recorded when it is more likely than not that some portion of the deferred income tax asset will not be realized . deferred income tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates on the date of enactment . the company recognizes all material tax positions , including all significant uncertain tax positions , in which it is more likely than not that the position will be sustained based on its technical merits and if challenged by the relevant taxing authorities . at each balance sheet date , unresolved uncertain tax positions are reassessed to determine whether subsequent developments require a change in the amount of recognized tax benefit . recent accounting pronouncements in may 2014 , the financial accounting standards board ( `` fasb `` ) issued accounting standards update ( `` asu `` ) 2014-09 , revenue from contracts with customers ( topic 606 ) . asu 2014-09 creates a new topic in the asc topic 606 and establishes a new control-based revenue recognition model , changes the basis for deciding when revenue is recognized over time or at a point in time , provides new and more detailed guidance on specific topics , and expands and improves disclosures about revenue . in addition , asu 2014-09 adds a new subtopic to the codification , asc 340-40 , other assets and deferred costs : contracts with customers , to provide guidance on costs related to obtaining a contract with a customer and costs incurred in fulfilling a contract with a customer that are not in the scope of another asc topic . the guidance in asu 2014-09 is effective for public entities for annual reporting periods beginning after december 15 , 2016 , including interim periods therein . early application is not permitted . management is in the process of assessing the impact of asu 2014-09 on the company 's financial statements . results of operations and financial condition for the year ended december 31 , 2015 as compared to the year ended december 31 , 2014 the following are the consolidated results of our operations for the year ended december 31 , 2015 compared to the year ended december 31 , 2014. replace_table_token_2_th 12 royalty income royalty income amounted to $ 517,000 for the year ended december 31 , 2015 compared with $ 427,000 for 2014. revenues represented royalties received from arthrex in connection with the arthrex asset purchase agreement . the increase during 2015 is the result of arthrex 's increased sales of the acquired product line . until we find a joint venture partner or buyer for our remaining intellectual property
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources net cash provided by operating activities was $ 331,000 for the year ended december 31 , 2015 compared to net cash provided by operating activities of $ 214,000 for 2014. our cash provided by operations improved during 2015 primarily due to our royalty revenue increasing by $ 90,000 as compared to 2014. we had no cash flows from investing or financing activities during the year ended december 31 , 2015 or 2014. we believe our cash balances of $ 13,840,000 as of december 31 , 2015 are adequate to meet our cash needs for the next twelve months and beyond . off-balance sheet arrangements we have no off-balance sheet financing arrangements . contractual obligations we currently have no contractual obligations . forward looking statements our business , financial condition , results of operations , cash flows and prospects , and the prevailing market price and performance of our common stock , may be adversely affected by a number of factors , including the matters discussed in `` risk factors '' . certain statements and informationset forth in this annual report on form 10-k , as well as other written or oral statements made from time to time by us or by our authorized executive officers on our behalf , constitute `` forward-looking statements . ''
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these forward-looking statements are made only as of the date of this annual report on form 10-k. we do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments . overview our business strategy is to acquire and develop inpatient behavioral healthcare facilities and improve our operating results within our inpatient facilities and our other behavioral healthcare operations . our goal is to improve the operating results of our facilities by providing high quality services , expanding referral networks and marketing initiatives while meeting the increased demand for behavioral healthcare services through expansion of our current locations as well as developing new services within existing locations . on march 1 , 2012 , we completed the acquisition of three inpatient behavioral healthcare facilities with a combined 166 licensed beds from haven for $ 91.0 million of cash consideration . also on march 1 , 2012 , we amended our senior secured credit facility to provide an incremental $ 25.0 million of term loans and increase the revolving credit facility by $ 45.0 million , from $ 30.0 million to $ 75.0 million . we used the net proceeds from the sale of our common stock , the incremental term loans of $ 25.0 million and a $ 5.0 million borrowing under the revolving credit facility to fund the acquisition of the haven facilities . on december 20 , 2011 , we completed the offering of 9,583,332 shares of our common stock ( including shares sold pursuant to the exercise of the over-allotment option that we granted to the underwriters as part of the offering ) at a price of $ 7.50 per share . the net proceeds to us from the sale of the shares , after deducting the underwriting discount of approximately $ 3.8 million and additional offering-related expenses of approximately $ 0.9 million , were approximately $ 67.2 million . 25 on november 1 , 2011 , we completed our acquisition of phc , a leading national provider of inpatient and outpatient mental health and drug and alcohol addiction treatment programs in delaware , michigan , nevada , pennsylvania , utah and virginia . in connection with the acquisition , we issued $ 150.0 million of our senior notes and used the proceeds of such debt issuance primarily to pay a cash distribution of $ 74.4 million to existing acadia stockholders , repay phc debt of $ 26.4 million , fund the $ 5.0 million cash portion of the acquisition consideration issued to the holders of phc 's class b common stock , pay a $ 20.6 million fee to terminate the professional services agreement between acadia and waud capital partners and pay transaction-related expenses . the senior notes were issued at a discount of $ 2.5 million . additionally , pursuant to the phc merger agreement , we issued 4,891,667 shares of our common stock to the holders of phc 's class a common stock and class b common stock based on a one-to-four conversion rate and 19,566,668 phc shares outstanding immediately prior to the acquisition . on april 1 , 2011 , we completed the acquisition of yfcs , the largest private , for-profit provider of behavioral health , education and long-term support services exclusively for abused and neglected children and adolescents , for approximately $ 178.0 million . yfcs operates 13 facilities in eight states and offers a broad array of behavioral programs to adults , adolescents and children . these programs include behavioral acute and residential care in inpatient facilities , therapeutic group homes , therapeutic foster care services , education , and other community based services . this transaction was financed with a $ 135.0 million term loan facility and $ 10 million of borrowings on a $ 30 million revolving credit facility , as well as $ 52.5 million of new equity contributions . the recent acquisitions of facilities and services make us the leading publicly traded pure-play provider of inpatient behavioral healthcare services based upon number of licensed beds in the united states . we believe that the yfcs , phc and haven acquisitions position the combined company as a leading platform in a highly fragmented industry under the direction of an experienced management team that has significant industry expertise . we expect to take advantage of several strategies that are more accessible as a result of our increased size and geographic scale , including implementing a national marketing strategy to attract new patients and referral sources , increasing our volume of out-of-state referrals , providing a broader range of services to new and existing patients and clients and selectively pursuing opportunities to expand our facility and bed count . sources of revenue we receive payments from the following sources , or services rendered in our facilities : ( i ) state governments under their respective medicaid programs and otherwise ; ( ii ) private insurers , including managed care plans ; ( iii ) the federal medicare program ; and ( iv ) directly from other payors including individual patients and clients . for the year ended december 31 , 2011 , on a pro forma basis giving effect to the acquisitions of yfcs and phc , approximately 67 % of our revenue came from medicaid , approximately 20 % came from private insurers , approximately 8 % came from medicare and approximately 5 % came from private pay and other payors . 26 results of operations the following table illustrates our consolidated results of operations from continuing operations for the respective periods shown ( dollars in thousands ) : replace_table_token_3_th year ended december 31 , 2011 compared to the year ended december 31 , 2010 revenue before provision for doubtful accounts . story_separator_special_tag revenue and accounts receivable revenue is derived from services rendered to patients for inpatient psychiatric and substance abuse care , outpatient psychiatric care and adolescent residential treatment and includes revenue payable by the medicare program administered by cms , state medicaid programs , commercial insurance ( in network and out of network ) , and other payors including individual patients . revenue is recorded in the period in which services are provided at established billing rates less contractual adjustments based on amounts reimbursable by medicare or medicaid under provisions of cost or prospective reimbursement formulas or amounts due from other third-party payors at contractually determined rates . the following table presents revenue by payor type and as a percentage of revenue before provision for doubtful accounts for the years ended december 31 , 2010 and 2011 ( in thousands ) : replace_table_token_9_th 32 the following tables present a summary of our aging of accounts receivable as of december 31 , 2011 and 2010 : december 31 , 2011 replace_table_token_10_th december 31 , 2010 replace_table_token_11_th medicaid accounts receivable as of december 31 , 2011 include less than $ 0.5 million of accounts pending medicaid approval . these accounts are aged less than 60 days and are classified as medicaid because we have experienced between 80 % and 90 % approval by medicaid for this class of receivables . allowance for contractual discounts the company derives a significant portion of its revenues from medicare , medicaid and other payors that receive discounts from its established billing rates . the medicare and medicaid regulations and various managed care contracts under which these discounts must be calculated are complex and are subject to interpretation and adjustment , and may include multiple reimbursement mechanisms for different types of services provided in our inpatient facilities and cost settlement provisions . we estimate the allowance for contractual discounts on a payor-specific basis given our interpretation of the applicable regulations or contract terms . the services authorized and provided and related reimbursement are often subject to interpretation that could result in payments that differ from our estimates . additionally , updated regulations and contract renegotiations occur frequently necessitating continual review and assessment of the estimation process by our management . settlements under cost reimbursement agreements with third-party payors are estimated and recorded in the period in which the related services are rendered and are adjusted in future periods as final settlements are determined . final determination of amounts earned under the medicare and medicaid programs often occurs in subsequent years because of audits by such programs , rights of appeal and the application of numerous technical provisions . in the opinion of management , adequate provision has been made for any adjustments and final settlements . however , there can be no assurance that any such adjustments and final settlements will not have a material effect on the company 's financial condition or results of operations . the company 's cost report receivables were $ 0.5 million at december 31 , 2011 compared to cost report payables of $ 0.1 million at december 31 , 2010 , and are included in other current assets and other current liabilities , respectively , in the consolidated balance sheets . the company believes that these receivables and payables are properly stated and are not likely to be settled for a significantly different amount . the net adjustments to estimated cost report settlements resulted in increases to revenue of approximately $ 0.2 million and $ 0.1 million for the years ended december 31 , 2011 and 2010 , respectively . the company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations or wrongdoing . while no such regulatory inquiries have been made , compliance with such laws and regulations can be subject to future government review and interpretation , as well as significant regulatory action including fines , penalties and exclusion from the medicare and medicaid programs . allowance for doubtful accounts our ability to collect outstanding patient receivables from third party payors is critical to our operating performance and cash flows . the primary collection risk with regard to patient receivables relates to uninsured patient accounts or patient accounts for which primary insurance has paid , but the portion owed by the patient remains outstanding . we estimate uncollectible accounts and establish an allowance for doubtful accounts in order to adjust accounts receivable to estimated net realizable value . in evaluating the collectability of accounts receivable , the company considers a number of factors , including the age of the accounts , historical 33 collection experience , current economic conditions , and other relevant factors . accounts receivable that are determined to be uncollectible based on the company 's policies are written off to the allowance for doubtful accounts . significant changes in payor mix or business office operations could have a significant impact on our results of operations and cash flows . insurance we are subject to medical malpractice and other lawsuits due to the nature of the services we provide . we have professional and general liability insurance for claims in excess of a $ 50,000 deductible with an insured excess limit of $ 25 million . the reserve for professional and general liability risks is estimated based on historical claims , demographic factors , industry trends , severity factors , and other actuarial assumptions calculated by an independent third-party actuary . the estimated accrual for professional and general liabilities could be significantly affected should current and future occurrences differ from historical claim trends and expectations . while claims are monitored closely when estimating professional and general liability accruals , the complexity of the claims and wide range of potential outcomes often hampers timely adjustments to the assumptions used in these estimates . the professional and general liability reserve was $ 2.8 million as of december 31 , 2011 , of which $ 1.2
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources historical cash used in continuing operating activities for the year ended december 31 , 2011 was $ 18.6 million compared to cash provided by continuing operating activities of $ 8.1 million for the year ended december 31 , 2010. the decrease in cash provided by continuing operating activities is primarily attributable to transaction-related expenses of $ 41.5 million partially offset by cash provided by continuing operating activities of the yfcs facilities acquired on april 1 , 2011 and the phc facilities acquired on november 1 , 2011. as of december 31 , 2011 , our working capital of $ 71.9 million , including cash and cash equivalents of $ 61.1 million , was higher than normal because of the proceeds from our offering of common stock completed on december 20 , 2011 that were not used until the completion of the acquisition of the haven facilities on march 1 , 2012. days sales outstanding as of december 31 , 2011 was 38 compared to 31 as of december 31 , 2010. cash used in continuing investing activities for the year ended december 31 , 2011 was $ 225.3 million compared to $ 1.5 million for the year ended december 31 , 2010. cash used in continuing investing activities for the year ended december 31 , 2011 primarily consisted of cash paid for the yfcs and phc acquisitions of $ 206.4 million , cash paid for capital expenditures of $ 9.6 million and cash paid for real estate acquisitions of $ 8.7 million . cash used for routine and expansion capital expenditures was approximately $ 3.5 million and $ 6.1 million , respectively , for the year ended december 31 , 2011. we define expansion capital expenditures as those that increase the capacity of our facilities or otherwise enhance revenue . routine or maintenance capital expenditures were approximately 1.6 % of our revenue for the year ended december 31 , 2011. cash used in continuing investing activities for the year ended december 31 , 2010 consisted primarily of $ 1.5 million in cash paid for capital expenditures .
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we recognized our initial revenues from sales of the sq3000 in the second quarter of 2015. during 2016 , we received sq3000 follow-on orders totaling approximately $ 4.7 million from a key customer for a next-generation consumer electronics product . due to these sales and the competitive advantages offered by our mrs technology , we believe the future sales potential of the sq3000 is significant . we have incorporated our mrs technology into a new 3d scanning system , cybergage®360 , which we believe will serve a wide range of inspection applications in the general purpose 3d metrology market . we sold our first two cybergage360 units in the fourth quarter of 2016. most customers are taking longer than originally anticipated to evaluate the functionality and benefits of cybergage360 before adopting it for their engineering and quality assurance programs . after starting slowly in the first half of 2017 , we anticipate steadily increasing sales of cybergage360 by the end of 2017. we believe that the unique performance characteristics of our mrs technology , which inhibit reflections and enable very accurate measurements at fast speeds , combined with ease of use , will give cybergage360 a competitive advantage in the marketplace for 3d scanning systems . 23 we also have committed funds to development of our mx600 system for inspection of memory modules at the end of the production line after singulation . in 2016 , we recognized $ 5.7 million of revenue from sales of this product to one of the world 's top four memory manufacturers . we believe that additional mx600 orders could be received in future periods . we have continued to invest in our wafersense/reticlesense product lines and have recently announced new offerings for advanced particle measurement and a line of multi-purpose sensors that measure leveling , vibration and humidity in an all-in-one wireless real-time device . we ended the fourth quarter of 2016 with a backlog of $ 10.2 million , down from $ 12.4 million at september 30 , 2016 , and down from $ 15.0 million at december 31 , 2015. we are forecasting sales of $ 11.5 to $ 12.5 million for the first quarter of 2017 , based on the anticipated timing of orders for 3d products and customer acceptances . order activity and sales prospects for sq3000 3d aoi systems reflect a strong pipeline of opportunities , including large projects for multiple sq3000 systems . given these factors , we are presently forecasting sales of $ 16 to $ 19 million for the second quarter of 2017 , and solid growth for all of 2017. longer term , the anticipated sales growth of our mrs-enabled 3d products and wafersense/reticlesense products should increase our revenues and net income . we believe that we have the resources required to attain our growth objectives , given our available cash and marketable securities balances totaling $ 25.9 million at december 31 , 2016. our ability to achieve our forecast and to implement our strategy effectively is subject to numerous uncertainties and risks , including the risks identified in item 1a of this annual report on form 10-k. we can not assure you that our efforts will be successful . revenues our revenues increased by 61 % to $ 66.2 million in 2016 from $ 41.1 million in 2015 and decreased by 12 % in 2015 from $ 46.5 million in 2014. the following table sets forth , for the years indicated , revenues by product line ( in thousands ) : replace_table_token_3_th revenue from sales of smt and high precision 3d oem sensors increased by $ 5.8 million or 44 % to $ 18.8 million in 2016 , and decreased by $ 2.5 million or 16 % to $ 13.0 million in 2015 , from $ 15.5 million in 2014. revenue increases in 2016 resulted from a significant rebound in sales of legacy 2d laseralign sensors to oem customers , as well as sales of 3d mrs sensors to kla-tencor and nordson , and from an $ 800,000 order for 3d mrs-enabled sensors from a major new customer for a general purpose metrology application related to the inspection of finished goods . the rebound in sales of 2d laseralign sensors was driven by one oem customer which experienced a significant increase in sales of its products that incorporate our sensors . revenue decreases in 2015 resulted from soft demand for legacy 2d laseralign sensors from oem customers selling into china , when market conditions were challenging . sales to kla-tencor are expected to continue to increase as our sensors are incorporated into a growing portion of kla-tencor 's back-end semiconductor packaging inspection systems . nordson introduced its 3d mrs-equipped aoi system at the ipc apex expo trade show in march 2016 to a very favorable reception . we believe that sales of sensors under our nordson supply agreement should be a positive contributor to our future sales growth . in addition , we believe that our major new customer using our 3d mrs-enabled sensors to inspect finished goods could generate significant sales in the future . revenue from sales of semiconductor sensors , principally our wafersense ® and reticlesense ® product lines , increased by $ 2.4 million or 31 % to $ 10.1 million in 2016 , and increased by $ 82,000 or 1 % to $ 7.7 million in 2015 , from $ 7.6 million in 2014. the sales increases in 2016 were due in part to our new auto-multi sensors that combine leveling , vibration and humidity measurements into an all-in-one wireless , real-time device . sales increases were also due to increased customer awareness and improved account penetration at major semiconductor manufacturers and capital equipment suppliers . sales of semiconductor sensors in 2015 were negatively impacted by a general slowdown in the semiconductor capital equipment market and production delays impacting sales of our new auto-multi sensors . story_separator_special_tag when we determine that the carrying value of intangibles , long-lived assets and related goodwill may not be recoverable based upon the existence of one or more of the above indicators of impairment , we measure any potential impairment based on a projected discounted cash flow method using a discount rate that we believe is commensurate with the risk inherent in our current business model . we utilize the income approach to estimate our fair value . the income approach is a valuation technique under which we estimate future cash flows using financial forecasts . future estimated cash flows are discounted to their present value to calculate fair value . when considering fair value , we also give consideration to the control premium in excess of our current market capitalization that might be obtained from a third party acquirer . these assumptions require significant judgment and actual results may differ from assumed or estimated amounts . at december 31 , 2016 we had goodwill of $ 1.4 million . our recent analysis performed in the fourth quarter of 2016 indicates that our goodwill is not impaired . however , our conclusion could change in the future , if our assumptions about future economic conditions , revenue growth or profitability change . any resulting impairment charge could have a material effect on our financial position and results of operations in the future . income taxes . significant judgment is required in determining worldwide income tax expense based upon tax laws in the various jurisdictions in which we operate . we have established reserves for uncertain tax positions by applying the “ more likely than not ” threshold ( i.e . , a likelihood of occurrence greater than fifty percent ) . the recognition threshold is met when an entity concludes that a tax position , based solely on its technical merits , is more likely than not to be sustained upon examination by the relevant taxing authority . those tax positions failing to qualify for initial recognition are recognized in the first interim period in which they meet the more likely than not standard , or are resolved through negotiation or litigation with the taxing authority , or upon expiration of the statute of limitations . de-recognition of a tax position that was previously recognized occurs when an entity subsequently determines that a tax position no longer meets the more likely than not threshold of being sustained . all tax positions are analyzed periodically and adjustments are made as events warrant modification , such as the completion of audits or the expiration of statutes of limitations , which may result in future charges or credits to income tax expense . 29 as part of the process of preparing consolidated financial statements , management is required to estimate income taxes in each of the jurisdictions in which we operate . this process involves estimating the current tax liability , as well as assessing temporary differences arising from the different treatment of items for financial statement and tax purposes . these differences result in deferred tax assets and liabilities , which are recorded on our consolidated balance sheet . we have significant deferred tax assets as a result of temporary differences between taxable income on our tax returns and u.s. gaap income , research and development tax credit carry forwards and federal , state and foreign net operating loss carry forwards . a deferred tax asset generally represents future tax benefits to be received when temporary differences previously reported in our consolidated financial statements become deductible for income tax purposes , when net operating loss carry forwards are applied against future taxable income , or when tax credit carry forwards are utilized on our tax returns . we assess the realizability of our deferred tax assets and the need for a valuation allowance based on the guidance provided in current financial accounting standards . significant judgment is required in determining the realizability of our deferred tax assets . the assessment of whether valuation allowances are required considers , among other matters , the nature , frequency and severity of any current and cumulative losses , forecasts of future profitability , the duration of statutory carry forward periods , our experience with loss carry forwards not expiring unused and tax planning alternatives . during the fourth quarter of 2016 , we substantially reduced the valuation allowances recorded against our united states and singapore based deferred tax assets , primarily due to significant improvement in our operating results and financial outlook . in analyzing the need for valuation allowances , we first considered our history of cumulative operating results for income tax purposes over the past three years in each of the tax jurisdictions where we operate , our financial performance in recent quarters , statutory carry forward periods and tax planning alternatives . finally , we considered both our near and long-term financial outlook . after considering all available evidence both positive and negative , we concluded that a substantial reduction in the valuation allowances recorded against our united states and singapore based deferred tax assets was appropriate . a similar analysis was performed at december 31 , 2015 , resulting in $ 10.6 million of valuation allowances for our deferred tax assets , primarily due to our cumulative historical operating losses . the $ 9.6 million reduction in valuation allowances for 2016 caused us to recognize a significant non-cash income tax benefit . the reduction resulted from utilization of available net operating loss carryforwards and our determination that significant valuation allowances were no longer needed due to the improvement in our operating results and financial outlook . derivatives and hedging . we may enter into foreign exchange forward contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies associated with our subsidiary in singapore . these transactions are designated as cash flow hedges and are recorded in the accompanying consolidated balance sheet at fair value .
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources our cash and cash equivalents increased by $ 6.4 million in 2016 , principally resulting from $ 9.1 million of cash provided by operating activities , proceeds of $ 6.2 million from sales and maturities of marketable securities , and proceeds of $ 646,000 from stock option exercises and share purchases under our employee stock purchase plan . cash provided by these activities was offset in part by purchases of marketable securities totaling $ 8.1 million and purchases of fixed assets and capitalized patent costs totaling $ 1.4 million . our cash and cash equivalents fluctuate in part because of sales and maturities of marketable securities and investment of cash balances in marketable securities , and from other sources of cash . accordingly , we believe the combined balances of cash and marketable securities provide a more reliable indication of our available liquidity than cash balances alone . combined balances of cash and marketable securities increased by $ 8.3 million to $ 25.9 million as of december 31 , 2016 from $ 17.6 million as of december 31 , 2015. operating activities provided $ 9.1 million of cash in 2016. cash provided by operations included net income of $ 11.6 million , including a $ 5.3 million deferred income tax benefit and non-cash expenses totaling $ 2.6 million for depreciation and amortization , provision for doubtful accounts , non-cash gains from foreign currency transactions and equity-based compensation costs . changes in operating assets and liabilities providing cash included a decrease in inventories of $ 1.0 million , an increase in accounts payable of $ 550,000 and an increase in accrued expenses of $ 1.9 million . changes in operating assets and liabilities using cash included an increase in accounts receivable of $ 2.8 million , an increase in other assets of $ 346,000 and a decrease in advance customer payments of $ 153,000. inventories decreased due to customer acceptance of our remaining mx600 backlog , offset in part by new purchases of inventory needed to manufacture products for future sales requirements .
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41 for information on each of the following critical accounting policies and or estimates , refer to the discussion in the notes to the consolidated financial statements as indicated in the table below : revenue recognition note 2 - summary of significant accounting policies trade accounts receivable note 2 - summary of significant accounting policies loan receivable note 2 - summary of significant accounting policies warranties note 2 - summary of significant accounting policies inventory note 2 - summary of significant accounting policies investments note 2 - summary of significant accounting policies & note 3 - marketable securities income taxes note 2 - summary of significant accounting policies & note 6 - income taxes stock based compensation note 2 - summary of significant accounting policies & note 9 - stock compensation plans accounting terms and characteristics net sales our net sales are primarily generated through sales to our retail partners , dealer and distributor network and to original equipment manufacturers . refer to the revenue recognition discussion in note 2 to the consolidated financial statements . our sales are largely of a consumer nature ; therefore , backlog levels are not necessarily indicative of our future sales results . we aim to achieve a quick turnaround on orders we receive , and we typically ship most orders within 72 hours . net sales are subject to seasonal fluctuation . typically , sales of our consumer products are highest in the second quarter , due to increased demand during the spring and summer season , and in the fourth quarter , due to increased demand during the holiday buying season . our aviation products do not experience much seasonal variation , but are more influenced by the timing of aircraft certifications and the release of new products when the initial demand is typically the strongest . cost of sales/gross profit raw material costs are our most significant component of cost of goods sold . our existing practice of performing the design and manufacture of our products in-house has enabled us to source components from different suppliers and , where possible , to redesign our products to leverage lower cost components . we believe that our flexible production model allows our xizhi , jhongli , and linkou manufacturing plants in taiwan , our olathe , kansas , and salem , oregon manufacturing plants to experience relatively low costs of manufacturing . in general , products manufactured in taiwan have been our highest volume products . our manufacturing labor costs historically have been lower in taiwan than in olathe and salem . sales price variability has had and can be expected to have an effect on our gross profit . in the past , prices of our devices sold into the automotive/mobile market have declined due to market pressures and introduction of new products sold at lower price points . in recent years , pricing has stabilized in automotive/mobile allowing for stable to improving gross margins . the average selling prices of our aviation , outdoor , fitness , and marine products have historically been stable due to product mix and the introduction of more advanced products sold at higher prices . in 2014 , fitness pricing declined due to high volumes of lower-priced activity trackers . the effect of the sales price differences inherent within the mix of products sold could have a significant impact on our gross profit . 42 advertising expense our advertising expenses consist of costs for media advertising , cooperative advertising with our retail partners , point of sale displays , and sponsorships . selling , general and administrative expenses our selling , general and administrative expenses consist primarily of : · salaries for sales and marketing personnel ; · salaries and related costs for executives and administrative personnel ; · marketing , and other brand building costs ; · accounting and legal costs ; · information systems and infrastructure costs ; · travel and related costs ; and · occupancy and other overhead costs . research and development the majority of our research and development costs represent salaries for our engineers , costs for high technology components and costs of test equipment used in product and prototype development . approximately 82 % of the research and development of our products is performed in north america . we are committed to increasing the level of innovative design and development of new products as we strive for expanded ability to serve our existing consumer and aviation markets as well as new markets for active lifestyle products . income taxes we have experienced a relatively low effective corporate tax rate due to the proportion of our revenue generated by entities in tax jurisdictions with low statutory rates . in particular , the profit entitlement afforded our swiss-based companies based on their intellectual property rights ownership of our consumer products along with tax incentives offered by the taiwanese government on certain high-technology capital investments have continued to reduce our tax rate . we have taken advantage of the tax benefit in taiwan since our inception and we expect to continue to benefit from lower effective tax rates at least through 2015 . 43 results of operations the following table sets forth our results of operations as a percentage of net sales during the periods shown ( the table may not foot due to rounding ) : replace_table_token_6_th the following table sets forth our results of operations through income before income taxes for each of our five segments during the period shown . for each line item in the table the total of the segments ' amounts equals the amount in the consolidated statements of income data included in item 6 . 44 replace_table_token_7_th replace_table_token_8_th replace_table_token_9_th 45 comparison of 52-weeks ended december 27 , 2014 and december 28 , 2013 net sales replace_table_token_10_th net sales increased 9 % in 2014 when compared to the year-ago period . story_separator_special_tag during 2013 , the u.s. dollar weakened 4.1 % and 2.2 % , respectively , relative to the euro and british pound sterling resulting in a foreign currency gain of $ 7.5 million in garmin ltd. and our european subsidiaries . the u.s. dollar strengthened 3.3 % against the taiwan dollar resulting in a $ 30.2 million foreign currency gain due to the fluctuation of asset balances throughout the year . the net result of these currency moves combined with other losses of $ 2.1 million , and the timing of transactions during the year was a net gain of $ 35.5 million for the company . the $ 20.0 million currency loss in 2012 was due primarily to weakening of the u.s. dollar compared to the taiwan dollar . during 2012 , the u.s. dollar weakened 3.8 % compared to the taiwan dollar resulting in a loss of $ 31.3 million . this was partially offset by the u.s. dollar weakening 2.1 % and 4.3 % , respectively , compared to the euro and the british pound sterling , resulting in a $ 10.4 million gain . the remaining net currency gain of $ 0.8 million is related to other currencies and timing of transactions . income tax provision our income tax expense decreased by $ 41.0 million , to $ 41.1 million for the fiscal year 2013 , from $ 82.1 million for the fiscal year 2012. contributing to the significant decrease were : 53 · release of uncertain tax position reserves due to expiration of certain statutes of limitations or completion of tax audits of $ 79.9 million in fiscal year 2013 compared to releases of $ 13.0 million in fiscal year 2012 and · research and development tax credits of $ 6.3 million related to 2012 which were recognized when the related legislation was enacted in january 2013 partially offset by unfavorable impacts including : · unfavorable income mix across tax jurisdictions and · expiration of certain taiwan tax holidays . net income as a result of the various factors noted above , net income increased 13 % to $ 612.4 million for fiscal year 2013 compared to $ 542.4 million for fiscal year 2012. story_separator_special_tag 10pt times new roman , times , serif `` > increased purchases of property and equipment of $ 17.6 million we have budgeted approximately $ 85 million of capital expenditures during fiscal 2015 to include some facility expansion , along with normal ongoing capital expenditures and maintenance activities . it is management 's goal to invest the on-hand cash consistent with garmin 's investment policy , which has been approved by the board of directors . the investment policy 's primary purpose is to preserve capital , maintain an acceptable degree of liquidity , and maximize yield within the constraint of low credit risk . garmin 's average return on cash and investments during fiscal 2014 , 2013 , and 2012 were approximately 1.3 % , 1.4 % and 1.4 % , respectively . the fair value of our securities varies from period to period due to changes in interest rates , in the performance of the underlying collateral and in the credit performance of the underlying issuer , among other factors . in 2013 , garmin experienced unrealized , non-cash losses on its investment portfolio resulting in a balance of $ 57,356 and $ 4,377 of gross other-than-temporary impairment and other unrealized losses on marketable securities at december 28 , 2013. the amortized cost and estimated fair value of the securities at an unrealized loss position at december 28 , 2013 were $ 1,215,498 and $ 1,153,765 , respectively . this decrease in estimated fair value was primarily due to market valuations on mortgage-backed securities and obligations of states and political subdivisions declining . the decline was due to increases in the 10 year treasury bond yield during 2013 , which caused market valuations of securities in our investment portfolios to decline . the 10 year treasury bond yield decreased in 2014 , resulting in a balance of $ 13,031 and $ 8,420 of gross other-than-temporary impairment and other unrealized losses on marketable securities at december 27 , 2014. the amortized cost and estimated fair value of the securities at an unrealized loss position at december 27 , 2014 were $ 1,276,404 and $ 1,254,953 , respectively . approximately 59 % of securities in our portfolio were at an unrealized loss position at december 27 , 2014. we have the ability to hold these securities until maturity or their value is recovered . we do not consider these unrealized losses to be other than temporary credit losses because there has been no deterioration in credit quality and no change in the cash flows of the underlying securities . we do not intend to sell the securities and it is not more likely than not that we will be required to sell the securities ; therefore , no impairment has been recorded in the accompanying condensed consolidated statement of income . 56 financing activities replace_table_token_28_th the $ 192.8 million increase in cash used in financing activities in fiscal year 2014 compared to fiscal year 2013 was primarily due to the following : · increased purchase of treasury stock of $ 183.2 million under a share repurchase authorization and · increased dividend payments of $ 8.4 million due to the increased dividend per share that was effective beginning in the second calendar quarter of 2014 the $ 157.0 million increase in cash used in financing activities in fiscal year 2013 compared to fiscal year 2012 was primarily due to the following : · increased dividend payments of $ 98.3 million due to the timing of our calendar fourth quarter 2012 dividend occurring after the close of our fiscal year and the increase in our year-over-year dividend rate and · increased purchase of treasury stock of $ 58.4 million under a share repurchase authorization our dividend has progressively increased from $ 0.40
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources operating activities replace_table_token_26_th the $ 107.4 million decrease in cash provided by operating activities in fiscal year 2014 compared to fiscal year 2013 was primarily due to the following : · net income decreasing by $ 248.2 million , including the $ 307.6 million tax expense related to the inter-company restructuring , as discussed in the results of operations section above · accounts receivable providing $ 66.0 million less cash primarily due to the increasing sales in fourth quarter 2014 and timing of collections · deferred revenue/costs providing $ 58.2 million less working capital benefit due to the increased amortization of previously deferred revenue/cost as discussed in the results of operations section above and · inventories , net providing $ 53.9 million less cash primarily due to new product categories and increasing product demand partially offset by increased reserves for obsolete and slow moving inventories partially offset by : · income taxes payable providing $ 130.2 million more cash due to the timing of disbursements primarily related to the inter-company restructuring offset by the release of uncertain tax position reserves due to expiration of certain statutes of limitations or completion of tax audits · the impact of deferred income taxes providing $ 81.9 million more cash due primarily to timing of disbursements partially related to the inter-company restructuring in addition to the reclassification of withholding taxes from current taxes payable .
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it is the client 's expectation in these engagements that the pre-established fee will not be exceeded except in mutually agreed upon circumstances . we generally recognize revenues under fixed-fee billing arrangements using a proportionate performance approach , which is based on work completed to-date versus our estimates of the total services to be provided under the engagement . contracts within our studer group solution are fixed-fee partner contracts with multiple deliverables , which primarily consist of coaching services , as well as seminars , materials and software products ( “ partner contracts ” ) . revenues for coaching services and software products are generally recognized on a straight-line basis over the length of the contract . all other revenues under partner contracts are recognized at the time the service is provided . fixed-fee arrangements also include software licenses for our revenue cycle management software and research administration and compliance software . licenses for our revenue cycle management software are sold only as a component of our consulting projects , and the services we provide are essential to the functionality of the software . therefore , revenues from these software licenses are recognized over the term of the related consulting services contract . license revenue from our research administration and compliance software is generally recognized in the month in which the software is delivered . fixed-fee engagements represented 47.4 % , 58.0 % , and 50.3 % of our revenues for the years ended december 31 , 2016 , 2015 , and 2014 , respectively . time-and-expense billing arrangements require the client to pay based on the number of hours worked by our revenue-generating professionals at agreed upon rates . time-and-expense arrangements also include certain speaking engagements , conferences , and publications purchased by our clients outside of partner contracts within our studer group solution . we recognize revenues under time-and-expense billing arrangements as the related services or publications are provided . time-and-expense engagements represented 38.7 % , 28.7 % , and 28.3 % of our revenues in 2016 , 2015 , and 2014 , respectively . in performance-based fee billing arrangements , fees are tied to the attainment of contractually defined objectives . we enter into performance-based engagements in essentially two forms . first , we generally earn fees that are directly related to the savings formally acknowledged by the client as a result of adopting our recommendations for improving operational and cost effectiveness in the areas we review . second , we have performance-based engagements in which we earn a success fee when and if certain predefined outcomes occur . often , performance-based fees supplement our time-and-expense or fixed-fee engagements . we do not recognize revenues under performance-based billing arrangements until all related performance criteria are met . performance-based fee revenues represented 8.9 % , 8.7 % , and 17.2 % of our revenues in 2016 , 2015 , and 2014 , respectively . the level of performance-based fees earned may vary based on our clients ' risk sharing preferences and the mix of services we provide . performance-based fee arrangements may cause significant variations in revenues , operating results , and average billing rates due to our level of execution and the timing of achievement of the performance-based criteria . clients that have purchased one of our software licenses can pay an annual fee for software support and maintenance . we also generate subscription revenue from our cloud-based analytic tools and solutions . software support and maintenance and subscription-based revenues are recognized ratably over the support or subscription period , which ranges from one to three years . these fees are billed in advance and included in deferred revenues until recognized . software support and maintenance and subscription-based revenues represented 5.0 % , 4.6 % , and 4.2 % of our revenues in 2016 , 2015 , and 2014 , respectively . 21 our quarterly results are impacted principally by our full-time consultants ' utilization rate , the billing rates we charge our clients , the number of our revenue-generating professionals who are available to work , and the amount of performance-based fees recognized , which often vary significantly between quarters . our utilization rate can be negatively affected by increased hiring because there is generally a transition period for new professionals that results in a temporary drop in our utilization rate . our utilization rate can also be affected by seasonal variations in the demand for our services from our clients . for example , during the third and fourth quarters of the year , vacations taken by our clients can result in the deferral of activity on existing and new engagements , which would negatively affect our utilization rate . the number of business work days is also affected by the number of vacation days taken by our consultants and holidays in each quarter . we typically have fewer business work days available in the fourth quarter of the year , which can impact revenues during that period . time-and-expense engagements do not provide us with a high degree of predictability as to performance in future periods . unexpected changes in the demand for our services can result in significant variations in utilization and revenues and present a challenge to optimal hiring and staffing . moreover , our clients typically retain us on an engagement-by-engagement basis , rather than under long-term recurring contracts . the volume of work performed for any particular client can vary widely from period to period . reimbursable expenses reimbursable expenses that are billed to clients , primarily relating to travel and out-of-pocket expenses incurred in connection with engagements , are included in total revenues and reimbursable expenses , and typically an equivalent amount of these expenses are included in total direct costs and reimbursable expenses . reimbursable expenses also include subcontractors who are billed to our clients at cost . story_separator_special_tag the decrease in operating margin was primarily attributable to the increase in salaries and related expenses for our revenue-generating professionals as a percentage of revenues , the decrease in litigation and other gains , net , and the increase in restructuring charges as a percentage of revenues , partially offset by the decrease in share-based compensation expense for our revenue-generating professionals in 2016 compared to 2015. other expense , net total other expense , net decreased $ 4.9 million to $ 15.1 million for the year ended december 31 , 2016 , from $ 19.9 million for the year ended december 31 , 2015 . the decrease was primarily attributable to a $ 1.9 million decrease in interest expense , net , a $ 1.7 million decrease in foreign currency transaction losses , and a $ 1.2 million gain during 2016 from an increase in the market value of our investments that are used to fund our deferred compensation liability compared to a $ 0.2 million loss during 2015. the decrease in interest expense was due to lower levels of borrowings under our credit facility during 2016 compared to 2015. income tax expense for the year ended december 31 , 2016 , our effective tax rate was 33.3 % as we recognized income tax expense from continuing operations of $ 19.7 million on income from continuing operations of $ 59.2 million . for the year ended december 31 , 2015 , our effective tax rate was 25.9 % as we recognized income tax expense from continuing operations of $ 21.7 million on income from continuing operations of $ 83.6 million . our effective tax rate for 2016 was lower than the statutory rate , inclusive of state income taxes , primarily due to valuation allowance reductions , certain credits and deductions , non-taxable income , and a discrete tax benefit related to share-based compensation , partially offset by non-deductible business expenses . in 2016 , we released certain valuation allowances primarily related to foreign tax credits , as we expect to have sufficient foreign source income to utilize these credits before their expiration . our effective tax rate for 2015 was lower than the statutory rate , inclusive of state income taxes , primarily due to the impact of a tax election made in the fourth quarter of 2015 to classify two of our wholly-owned foreign subsidiaries as disregarded entities for u.s. federal income tax purposes ( commonly referred to as a “ check-the-box ” election ) . as a result of this election , we realized an income tax benefit of $ 13.0 million , of which $ 0.7 million is unrecognized , resulting in a net recognized tax benefit of $ 12.3 million . see note 16 `` income taxes `` within the notes to our consolidated financial statements for additional information related to our income tax expense . 27 net income from continuing operations net income from continuing operations was $ 39.5 million for the year ended december 31 , 2016 , compared to $ 61.9 million for the year ended december 31 , 2015 . the $ 22.4 million decrease in net income from continuing operations was primarily due to the decrease in operating income , partially offset by the decrease in other expense , net , as discussed above . as a result of the decrease in net income from continuing operations , partially offset by the reduction in diluted shares outstanding due to the share repurchases in the fourth quarter of 2015 and first quarter of 2016 , diluted earnings per share from continuing operations for the year ended december 31 , 2016 was $ 1.84 compared to $ 2.74 for 2015 . discontinued operations net loss from discontinued operations for the year ended december 31 , 2016 was $ 1.9 million and primarily related to obligations for former employees , legal fees , and updated lease assumptions for vacated office space directly related to the sale of the legal segment . net loss from discontinued operations for the year ended december 31 , 2015 was $ 2.8 million . see note 3 `` discontinued operations `` within the notes to our consolidated financial statements for additional information about our discontinued operations . ebitda and adjusted ebitda ebitda decreased $ 24.5 million , or 16.9 % , to $ 120.9 million for the year ended december 31 , 2016 , from $ 145.4 million for the year ended december 31 , 2015 . adjusted ebitda decreased $ 10.8 million , or 7.8 % , to $ 128.5 million in 2016 from $ 139.3 million in 2015 . the decrease in ebitda was primarily due to the decrease in segment operating income , as discussed below in segment results , and the decrease in litigation and other gains . the decrease in adjusted ebitda was primarily due to the decrease in segment operating income , exclusive of restructuring charges . adjusted net income from continuing operations adjusted net income from continuing operations increased $ 1.2 million , or 1.8 % , to $ 68.7 million for the year ended december 31 , 2016 , compared to $ 67.6 million for the year ended december 31 , 2015 . as a result of the increase in adjusted net income from continuing operations , coupled with the reduction in diluted shares outstanding due to the share repurchases in the fourth quarter of 2015 and first quarter of 2016 , adjusted diluted earnings per share from continuing operations for 2016 was $ 3.21 , compared to $ 2.99 for 2015 . segment results healthcare revenues healthcare segment revenues decreased $ 22.0 million , or 4.9 % , to $ 424.9 million for the year ended december 31 , 2016 , from $ 446.9 million for the year ended december 31 , 2015 . revenues for 2016 included $ 10.3 million from our acquisitions of myrounding and hsm consulting , both of which were completed during 2016 , and
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | net cash used in investing activities was $ 86.6 million , $ 272.2 million , and $ 93.8 million for the years ended december 31 , 2016 , 2015 , and 2014 , respectively . the use of cash in 2016 primarily consisted of $ 69.1 million for purchases of businesses and $ 13.9 million for purchases of property and equipment . the use of cash in 2015 primarily consisted of $ 340.0 million for purchases of businesses , $ 18.6 million for purchases of property and equipment , and $ 15.4 million for the purchase of convertible debt investments in shorelight holdings , llc ( “ shorelight ” ) . shorelight , the parent company of shorelight education , is a u.s.-based company that partners with leading nonprofit universities to increase access and retention of international students , boost institutional growth , and enhance an institution 's global footprint . the zero coupon convertible notes 34 will mature on july 1 , 2020 , unless converted earlier . the use of cash in 2015 was partially offset by the net proceeds received of $ 108.5 million for the sale of the huron legal segment in december 2015. see note 3 `` discontinued operations '' within the notes to our consolidated financial statements for information about the sale of the huron legal segment . the use of cash in 2014 primarily consisted of $ 54.0 million for purchases of businesses , $ 25.9 million for purchases of property and equipment , and $ 12.5 million for the purchase of convertible debt investments in shorelight .
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markets in africa and brazil have opened at a similar pace compared to fiscal year 2015 , and crop qualities are mixed , with production volumes expected to be lower in most origins . although we are not seeing significant delays in customer orders , we expect shipping instructions to be weighted towards the second half of our fiscal year . in addition , while our own leaf inventories are well-managed , global tobacco leaf inventory volumes are high . this may have the effect of extending the duration of the oversupply conditions , despite reduced new crop production and a more positive outlook for demand from some customers based on recent recoveries in certain of their retail markets . looking beyond near-term market conditions , we are optimistic about the future as we believe there are several trends in our business that could provide opportunities for us to increase our market share and to offer additional services to our customers . we have recently seen an increase in the level of supply chain services , which include direct purchasing , that we provide our customers , notably in the united states , mexico , brazil , and the dominican republic . we believe these moves acknowledge the efficiencies and services that global leaf suppliers bring to the entire supply chain . in addition , we believe that compliant leaf requirements and reduction in sourcing complexity will continue to be important to our customers and should favor stable global leaf suppliers who are able to meet these requirements . 18 results of operations amounts described as net income and earnings per diluted share in the following discussion are attributable to universal corporation and exclude earnings related to non-controlling interests in subsidiaries . the total for segment operating income referred to in the discussion below is a non-gaap financial measure . this measure is not a financial measure calculated in accordance with gaap and should not be considered as a substitute for net income , operating income , cash flows from operating activities or any other operating performance measure calculated in accordance with gaap , and it may not be comparable to similarly titled measures reported by other companies . we have provided a reconciliation of the total for segment operating income to consolidated operating income in note 15 . `` operating segments `` to the consolidated financial statements in item 8. we evaluate our segment performance excluding certain significant charges or credits . we believe this measure , which excludes these items that we believe are not indicative of our core operating results , provides investors with important information that is useful in understanding our business results and trends . fiscal year ended march 31 , 2015 , compared to the fiscal year ended march 31 , 2014 net income for the fiscal year ended march 31 , 2015 , was $ 114.6 million , or $ 4.06 per diluted share , compared with last year 's net income of $ 149.0 million , or $ 5.25 per diluted share . last year 's results included a gain of $ 81.6 million before tax ( $ 53.1 million after tax , or $ 1.87 per diluted share ) , from the favorable outcome of litigation in brazil related to previous years ' excise tax credits . results for the current fiscal year included a further gain related to those tax credits , of $ 12.7 million before tax ( $ 0.29 per diluted share ) recorded in the fourth fiscal quarter from updated projections of the utilization of the credits before expiration . the current year also included an income tax benefit of $ 8.0 million ( $ 0.28 per diluted share ) arising from a subsidiary 's payment of a portion of a fine following the resolution of a court case . pretax restructuring costs of $ 4.9 million ( $ 0.11 per diluted share ) and $ 6.7 million ( $ 0.15 per diluted share ) were also incurred for fiscal years 2015 and 2014 , respectively . excluding those items in both years , net income for the fiscal year increased $ 1.2 million ( $ 0.07 per diluted share ) compared to the same period last year . segment operating income , which excludes those items , was $ 167.2 million for fiscal year 2015 , a decrease of $ 8.0 million from the prior year . that reduction was primarily attributable to this year 's lower sales volumes , partially mitigated by a reduction in selling , general , and administrative costs . revenues of $ 2.3 billion for fiscal year 2015 declined 11 % compared with the previous year , driven mainly by those lower overall volumes and modestly lower green leaf costs . flue-cured and burley leaf tobacco operations other regions operating income for the other regions segment for the fiscal year ended march 31 , 2015 , was $ 125.8 million , down 6 % compared to $ 133.4 million in the previous fiscal year . the decrease was attributable mainly to reduced sales volumes in all regions along with inventory writedowns , primarily in africa and south america , reflecting this year 's oversupply market conditions . the impact of those factors was somewhat mitigated by improved gross margins , particularly in brazil , where volatile markets increased green leaf costs last year , as well as benefits from lower selling , general and administrative costs . results for europe were also negatively influenced by currency translation effects from a stronger u.s. dollar . selling , general , and administrative expenses for the segment declined for the fiscal year , mostly from lower currency remeasurement and exchange losses in the philippines and brazil , lower provisions for supplier advances , and positive comparisons of value-added tax valuation allowances , partly offset by higher customer claims . story_separator_special_tag in addition to our operating requirements for working capital , we expect to spend around $ 60 to $ 65 million during fiscal year 2016 for capital expenditures to maintain our facilities , complete the construction of a new manufacturing facility for our food ingredients business , and invest in opportunities to grow and improve our tobacco business . we also expect to provide about $ 12 million in funding to our pension plans . we have no long-term debt maturing before fiscal year 2020. after balancing our capital structure , any excess cash flow from operations after dividends and capital expenditures will be available to fund expansion , purchase our stock , or otherwise enhance shareholder value . story_separator_special_tag were unused and available to support seasonal working capital needs . we also have an active , undenominated universal shelf registration filed with the sec in november 2014 , that provides for future issuance of additional debt or equity securities . we have no long-term debt maturing in fiscal year 2016. derivatives from time to time , we use interest rate swap agreements to manage our exposure to changes in interest rates . upon repayment of outstanding term loans in december 2014 , we terminated $ 74 million notional amount of swap agreements . the fair value of these swap agreements was a liability of approximately $ 0.6 million . in january 2015 , we entered into interest rate swap agreements that convert the variable benchmark libor rate on the new term loans entered into in december 2014 to a fixed rate . with the swap agreements in place , the effective interest rates on the $ 150 million five-year term loan and the $ 220 million seven-year term loan were 2.95 % and 3.49 % , respectively , as of march 31 , 2015. these agreements were entered into to eliminate the variability of cash flows in the interest payments on our variable-rate five- and seven-year term loans and are accounted for as cash flow hedges . under the swap agreements , we receive variable rate interest and pay fixed rate interest . at march 31 , 2015 , the fair value of our open interest rate hedge swaps was a net liability of approximately $ 3 million . 24 we also enter forward contracts from time to time to hedge certain foreign currency exposures , primarily related to forecast purchases of tobacco and related processing costs in brazil , as well as our net monetary asset exposure in local currency there . we generally account for our hedges of forecast tobacco purchases as cash flow hedges . at march 31 , 2015 , the fair value of those open contracts was a net liability of approximately $ 0.3 million . we also had other forward contracts outstanding that were not designated as hedges , and the fair value of those contracts was a net asset of approximately $ 5 million at march 31 , 2015. for additional information , see note 9 to the consolidated financial statements in item 8. pension funding funds supporting our erisa-regulated u.s. defined benefit pension plan increased by $ 10 million during fiscal year 2015 to $ 204 million , as contributions and asset returns exceeded benefit payments . following the changes to the plan benefit formula during fiscal year 2014 , the accumulated benefit obligation ( “ abo ” ) and the projected benefit obligation ( “ pbo ” ) were both approximately $ 230 million as of march 31 , 2015 . the abo and pbo are calculated on the basis of certain assumptions that are outlined in note 11 to the consolidated financial statements in item 8. we expect to make contributions of about $ 12 million to our pension plans , including $ 5 million to our erisa-regulated plan , during the next year . it is our policy to regularly monitor the performance of the funds and to review the adequacy of our funding and plan contributions . contractual obligations our contractual obligations as of march 31 , 2015 , were as follows : replace_table_token_3_th ( 1 ) includes interest payments . interest payments on $ 429.9 million of variable rate debt were estimated based on rates as of march 31 , 2015 . the company has entered interest rate swaps that effectively convert the interest payments on the $ 370.0 million outstanding balance of its two bank term loans from variable to fixed . the fixed rate has been used to determine the contractual interest payments for all periods . in addition to principal and interest payments on notes payable and long-term debt , our contractual obligations include operating lease payments , inventory purchase commitments , and capital expenditure commitments . operating lease obligations represent minimum payments due under leases for various production , storage , distribution , and other facilities , as well as vehicles and equipment . tobacco inventory purchase obligations primarily represent contracts to purchase tobacco from farmers . the amounts shown above are estimates since actual quantities purchased will depend on crop yield , and prices will depend on the quality of the tobacco delivered . about 43 % of our crop year contracts to purchase tobacco are with farmers in brazil . we have partially funded our tobacco purchases in brazil and in other regions with advances to farmers and other suppliers , which totaled approximately $ 115 million , net of allowances , at march 31 , 2015 . in addition , we have guaranteed bank loans to farmers in brazil that relate to a portion of our tobacco purchase obligations there . at march 31 , 2015 , we were contingently liable under those guarantees for outstanding balances of approximately $ 17 million ( including accrued interest ) , and we had recorded a liability of approximately $ 2 million for the fair value of those guarantees . as tobacco is purchased and the related bank loans are repaid ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flow our operations generated about $ 226.5 million in operating cash flows in fiscal year 2015. that amount was about $ 230 million higher than the $ 3.5 million we required during the same period last fiscal year , primarily due to lower crop purchase volumes and green leaf prices . during the fiscal year ended march 31 , 2015 , we increased our cash balances by $ 85.3 million , spent $ 58.4 million on capital projects , returned $ 94.9 million to shareholders in the form of dividends and repurchases of our common and preferred stock , and refinanced a major portion of our capital structure , extending our debt maturities . at march 31 , 2015 , cash balances totaled $ 248.8 million . working capital working capital at march 31 , 2015 , was about $ 1.4 billion , up $ 145.4 million from last year 's level . the $ 85.3 million increase in cash and cash equivalents was partially offset by fewer advances to suppliers on smaller anticipated 2015 crops , down $ 19.7 million . we extended our debt maturities as part of our $ 800 million refinancing in december 2014 and , as a result , we have no principal payments due on our long-term debt over the next twelve months . tobacco inventories of $ 636.5 million at march 31 , 2015 , were relatively flat compared to inventory levels at the end of the prior fiscal year . we usually finance inventory with a mix of cash , notes payable , and customer deposits , depending on our borrowing capabilities , interest rates , and exchange rates , as well as those of our customers . we generally do not purchase material quantities of tobacco on a speculative basis . however , when we contract directly with farmers , we are often obligated to buy all stalk positions , which may contain less marketable leaf styles .
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we intend to file an investigational new drug application with the fda and thereafter commence phase 1 development in 2017 , subject to the availability of additional funding . cerc-406 is our lead preclinical candidate from our proprietary platform of compounds that inhibit catechol-o-methyltransferase , or comt , within the brain , which we refer to as our comti platform . we intend to develop cerc‑406 for the treatment of residual cognitive impairment symptoms in patients with mdd , subject to the availability of additional funding . further development of our product candidates will not be possible unless we secure additional funding . our strategy is to seek funding for our operations from further offerings of equity and debt securities , non-dilutive financing arrangements such as federal grants , collaboration agreements or out-licensing arrangements , and to explore strategic alternatives such as an acquisition , merger , or business combination . however , we may be unable to raise additional funds or enter into such other agreements or transactions on favorable terms , or at all . if we fail to raise capital or enter into such other arrangements or 73 transactions in the short term , we will have to significantly delay , scale back or discontinue the development and or commercialization of one or more of our product candidates or cease our operations altogether . we were incorporated in delaware in 2011 and commenced operations in the second quarter of 2011. since inception , our operations have included organizing and staffing our company , business planning , raising capital and developing our product candidates . we have no products approved for commercial sale and have not generated any revenue from product sales to date , and we continue to incur significant research , development and other expenses related to our ongoing operations . we have incurred losses in each period since our inception . as of december 31 , 2016 , we had an accumulated deficit of $ 70.0 million . we expect to incur significant expenses and operating losses for the foreseeable future as we continue the development and clinical trials of , and seek marketing approval for , our product candidates . our recurring losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern within one year of the date that our financial statements were issued , and our ability to continue as a going concern will require us to obtain additional financing to fund our operations . we have financed our operations primarily through a public offering , private placements of our common stock and convertible preferred stock , and the issuance of debt . our ability to become and remain profitable depends on our ability to generate product revenue . we do not expect to generate any product revenue unless , and until , we obtain marketing approval for , and commercialize , any of our product candidates . there can be no assurance as to whether or when we will achieve profitability . recent developments the aspire capital transaction on september 8 , 2016 , we entered into a common stock purchase agreement , or the purchase agreement , with aspire capital fund , llc , or aspire capital , pursuant to which aspire capital committed to purchase up to an aggregate of $ 15.0 million of shares of our common stock over the 30 -month term of the purchase agreement . upon execution of the purchase agreement , we issued and sold to aspire capital 250,000 shares of common stock at a price per share of $ 4.00 , for gross proceeds of $ 1.0 million . additionally , as consideration for aspire capital entering into the purchase agreement , we issued 175,000 shares of common stock as a commitment fee . the net proceeds of the aspire capital transaction , after offering expenses , were approximately $ 1.9 million for the year ended december 31 , 2016. as of december 31 , 2016 , we had sold 763,998 shares of common stock to aspire capital . subsequent to december 31 , 2016 , we sold an additional 965,165 shares of common stock to aspire capital under the terms of the purchase agreement for gross proceeds of approximately $ 789,000 . as of the date of this annual report on form 10-k , we may not issue additional shares of common stock to aspire capital under the purchase agreement unless shareholder approval to issue additional shares is obtained . the maxim group equity distribution agreement on january 27 , 2017 , we entered into an equity distribution agreement , or the equity distribution agreement , with maxim group llc , or maxim , as sales agent , pursuant to which we may offer and sell shares of our common stock through maxim from time to time . we have no obligation to sell any of the shares , and may at any time suspend offers under the equity distribution agreement . as of the date of this filing , we had sold 345,653 shares of our common stock through maxim under the equity distribution agreement for gross proceeds of $ 287,000. immediat ely after we file this annual report on form 10-k we expect that the amount of additional securities we will be able to sell under the registration statement on form s-3 will be approxima tely $ 3.3 million . engagement of suntrust robinson humphrey to assist with review of strategic alternatives on february 7 , 2017 , we announced the engagement of suntrust robinson humphrey , inc. , or suntrust , as our exclusive financial advisor to assist with our ongoing process to explore and review a range of strategic alternatives focused on maximizing stockholder value . potential strategic alternatives that may be explored or evaluated as part of this process include an acquisition , merger , business combination or other strategic transaction . story_separator_special_tag in the absence of a public trading market for our common stock prior to our initial public offering , our board of directors determined the fair market value of our common stock at various dates , with input from management , considering our most recently available third‑party valuations of common stock and its assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant . in valuing our common stock prior to our initial public offering , the board of directors determined the equity value of our business by considering a number of valuation approaches and allocation methodologies . valuation techniques considered included the current value method , the probability‑weighted expected return method , or pwerm , the option pricing method , or opm , and the hybrid method . given the range of possible financing and exit events that existed at the time we completed our valuations , which was prior to our initial public offering , we concluded the pwerm to be the most appropriate for purposes of valuing our common stock given our expected time to a liquidity event , subjectivity with regards to estimating possible proceeds from a future liquidation event and subjectivity with regards to the ability to estimate the probability of an ipo , sale or other financing events . the pwerm explicitly considered the various terms of our investor related documents , including various rights of each class of our stock , at the date of the liquidity event when those rights would either be executed or abandoned . under the pwerm , the value of each class of our stock was estimated using a probability‑weighted analysis of the present value of the returns afforded to our stockholders under each of the possible future exit scenarios . the scenarios included within the pwerm analysis included ipos , a sale transaction , remaining private and dissolution . discrete future outcomes considered under the pwerm included non‑ipo market based outcomes as well as ipo scenarios . in the non‑ipo scenarios , a large portion of the equity value was allocated to the preferred stock to incorporate higher aggregate liquidation preferences . in the ipo scenarios , the equity value was allocated pro rata among the shares of common stock and each series of preferred stock , which caused the common stock to have a higher relative value per share than under the non‑ipo scenario . the fair value of the enterprise determined using the ipo and non‑ipo scenarios was 78 weighted according to the board of directors ' estimate of the probability of each scenario at the time the valuation was completed . we have periodically determined the fair market value of our common stock at various dates using contemporaneous valuations performed in accordance with the guidance outlined in the american institute of certified public accountants ' accounting and valuation guide , valuation of privately‑held‑company equity securities issued as compensation . our common stock valuations were performed using a hybrid method , which used market approaches to determine our enterprise value . the hybrid method is a probability‑weighted expected return method where the equity value in one or more of the scenarios is calculated using an option‑pricing method . we selected the method based on availability and the quality of information to develop the assumptions for the methodology . we performed these contemporaneous valuations , with the assistance of a third‑party valuation specialist , as of july 11 , 2014 , december 31 , 2014 , march 31 , 2015 , june 30 , 2015 and september 30 , 2015. in addition , our board of directors considered various objective and subjective factors , along with input from management , to determine the fair market value of our common stock as of each grant date , including the following : prices at which we sold shares of our preferred stock and the superior rights and preferences of our preferred stock relative to our common stock ; the progress of our research and development programs , including the status of non‑clinical studies and clinical trials for our product candidates ; our stage of development and commercialization and our business strategy ; our financial condition , including cash on hand ; our historical and forecasted performance and operating results ; the composition of , and changes to , our management team and board of directors ; the lack of an active public market for our common stock and our preferred stock ; the likelihood of achieving a liquidity event , such as a sale of our company or an initial public offering , or ipo , given prevailing market conditions ; the analysis of ipos and the market performance of similar companies in the biopharmaceutical industry ; external market conditions affecting the biopharmaceutical industry ; and trends within the biopharmaceutical industry . the assumptions underlying these valuations represent management 's determinations , which involve inherent uncertainties and the application of management judgment . as a result , if factors or expected outcomes change and we use significantly different assumptions or estimates , our equity‑based compensation could be materially different . the following table summarizes by grant date the number of shares subject to options granted since january 1 , 2014 , the per share exercise price of the options , the fair market value of common stock underlying the options on date of grant and the per share fair value of the options : 79 replace_table_token_5_th results of operations comparison of the years ended december 31 , 2016 and 2015 grant revenue the following table summarizes our grant revenue for the years ended december 31 , 2016 and 2015 : year ended december 31 , 2016 2015 ( in thousands ) grant revenue $ 1,153 $ — grant revenue was $ 1.2 million for the year ended december 31 , 2016 and was comprised of revenue from
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources we have devoted most of our cash resources to research and development and general and administrative activities . since our inception , we have incurred net losses and negative cash flows from our operations . we expect to incur significant expenses and operating losses for the foreseeable future as we continue the development and clinical trials of , and seek marketing approval for , our product candidates . we incurred net losses of $ 16.5 million , $ 10.5 million and $ 16.1 million for the years ended december 31 , 2016 , 2015 and 2014 , respectively . at december 31 , 2016 , we had an accumulated deficit of $ 70.0 million , net working capital of $ 1.4 million and cash and cash equivalents of $ 5.1 million . to date , we have not generated any revenues from the sale of products and we do not anticipate generating any revenues from the sale of our product candidates for the foreseeable future . historically , we have financed our operations principally through private placements of common and convertible preferred stock , convertible and nonconvertible debt , as well as our ipo in october 2015. we will require substantial additional financing to fund our operations beyond the short term and to continue to execute our strategy . further development of our product candidates will not be possible unless we secure additional funding . our strategy is to seek funding for our operations from further offerings of equity or debt securities , non-dilutive financing arrangements such as federal grants , collaboration agreements or out-licensing arrangements , and to explore strategic alternatives such as an acquisition , merger , or business combination . based on our current research and development plans we 83 expect that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements well into the second quarter of 2017.
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our colonial life segment reported an increase in segment operating income of 1.6 percent in 2012 compared to 2011 , with higher operating revenue partially offset by less favorable risk results and higher amortization of deferred acquisition costs . premium income grew 5.2 percent in 2012 compared to 2011. the benefit ratio for colonial life was 52.5 percent in 2012 compared to 51.9 percent in 2011 due to less favorable risk results in the life and cancer and critical illness lines of business , partially offset by a more favorable benefit ratio for the accident , sickness , and disability line of business . colonial life sales decreased 1.1 percent in 2012 compared to 2011 , with a slight increase in core commercial market segment sales , which we define as accounts with fewer than 1,000 lives , offset by declines in large case commercial market segment sales and sales in the public sector market . persistency continues to be strong and was higher for all product lines in 2012 compared to 2011 . 30 our closed block segment reported a decrease in segment operating income of 22.9 percent in 2012 relative to 2011 , excluding the charges discussed in `` 2011 long-term care review and individual disability closed block reserves `` contained herein in item 7. also excluding these charges , individual disability risk results were favorable compared to 2011 due to higher claim recovery rates and a decrease in reserves for existing claims , while long-term care risk results were unfavorable compared to the prior year due to higher claim incidence rates , partially offset by higher claim resolutions . our investment portfolio continues to perform well , although our net investment income declined slightly in 2012 compared to 2011 , primarily due to a decline in yield in invested assets as we continue to invest new cash flows at lower rates . our asset quality remains strong , with a net unrealized gain on our fixed maturity securities of $ 7.2 billion at december 31 , 2012 , compared to $ 5.8 billion at december 31 , 2011. we believe our capital and financial positions are strong . at december 31 , 2012 , the risk-based capital ( rbc ) ratio for our traditional u.s. insurance subsidiaries , calculated on a weighted average basis using the naic company action level formula , was approximately 396 percent , compared to 405 percent at december 31 , 2011. the decline relative to 2011 results primarily from higher levels of capital required to support our business growth , but our rbc ratio at year end 2012 is within our target range of 375 percent to 400 percent . our leverage ratio , when calculated using consolidated debt to total consolidated capital , was 30.4 percent at december 31 , 2012 , compared to 28.7 percent at december 31 , 2011. the increase was due to the august 2012 issuance of $ 250.0 million of senior notes and the increase in short-term debt related to securities lending agreements outstanding , partially offset by our 2012 principal payments on the debt of northwind holdings , llc ( northwind holdings ) and tailwind holdings , llc ( tailwind holdings ) . our leverage ratio , when calculated excluding the non-recourse debt and associated capital of northwind holdings and tailwind holdings and the short-term debt arising from securities lending agreements , was 25.3 percent at december 31 , 2012 , compared to 23.5 percent at december 31 , 2011. cash equivalents and marketable securities held at unum group and our other intermediate holding companies are a significant source of liquidity for us and were approximately $ 805 million and $ 756 million at december 31 , 2012 and 2011 , respectively . further discussion is included in `` consolidated operating results , `` `` reconciliation of non-gaap financial measures , `` `` segment results , `` `` investments , `` and `` liquidity and capital resources `` contained in this item 7. outlook for 2013 we anticipate the general environment for 2013 to be similar to 2012 , with below-average economic growth and a continuation of low interest rates . while the environment will remain challenging , the need for our products and services remains strong . we believe we are taking the needed actions to protect our solid margins and returns and the impact of our pricing and risk actions will likely not have a favorable impact on our financial results until 2014 and beyond . while we anticipate that our 2013 operating growth will be below our long-term targets , we currently believe that our per diluted common share after-tax operating income growth will be neutral to positive relative to the level of 2012. during 2013 , we intend to remain focused on disciplined top-line growth in select markets , continued effectiveness in our operating performance , and a consistent , sustainable capital generation and deployment strategy . we continue to believe that our strategy of delivering a broad set of financial protection choices to employees while also enabling employers to define their financial contribution in support of those choices should enable us to continue in a leadership position in our markets over the long term . 2011 long-term care review and individual disability closed block reserves long-term care strategic review following a comprehensive and strategic review of our long-term care business , in february 2012 we announced that we would discontinue selling group long-term care . we discontinued selling individual long-term care during 2009. because both group and individual long-term care are considered closed blocks of business , effective december 31 , 2011 , we reclassified our long-term care products from the unum us segment to the closed block segment . story_separator_special_tag for unum us group short-term disability products , an estimate of the value of future payments to be made on claims already submitted , as well as ibnr claims , is determined in aggregate rather than on the individual claimant basis that we use for our long-term products , using historical patterns of claim incidence as well as historical patterns of aggregate claim resolution rates . the average length of time between the event triggering a claim under a policy and the final resolution of those claims is much shorter for these products than for our long-term liabilities and results in less estimation variability . 34 claim reserves supporting the unum us group life and accidental death and dismemberment products represent approximately 3.9 percent of our total claim reserves at december 31 , 2012. claim reserves for these products are related primarily to death claims reported but not yet paid , ibnr death claims , and a liability for waiver of premium benefits . the death claim reserve is based on the actual face amount to be paid , the ibnr reserve is calculated using the count and severity method , and the waiver of premium benefits reserve is calculated using the tabular reserve methodology . claim reserves supporting our unum uk segment represent approximately 9.7 percent of our total claim reserves at december 31 , 2012 , and are calculated using generally the same methodology that we use for unum us disability and group life reserves . the assumptions used in calculating claim reserves for this line of business are based on standard united kingdom industry experience , adjusted for unum uk 's own experience . the majority of the colonial life segment lines of business have short-term benefits , which generally have less estimation variability than our long-term products because of the shorter claim payout period . our claim reserves for colonial life 's lines of business , which approximate 1.4 percent of our total claim reserves at december 31 , 2012 , are predominantly determined using the incurred loss development method based on our own experience . the incurred loss development method uses the historical patterns of payments by loss date to predict future claim payments for each loss date . where the incurred loss development method may not be appropriate , we estimate the incurred claims using an expected claim cost per policy or other measure of exposure . the key assumptions for claim reserves for the colonial life lines of business are : ( 1 ) the timing , rate , and amount of estimated future claim payments ; and ( 2 ) the estimated expenses associated with the payment of claims . the following table displays policy reserves , incurred claim reserves , and ibnr claim reserves by major product line , with the summation of the policy reserves and claim reserves shown both gross and net of the associated reinsurance recoverable . incurred claim reserves represent reserves determined for each incurred claim and also include estimated amounts for litigation expenses and other expenses associated with the payment of the claims as well as provisions for claims which we estimate will be reopened for our long-term care products . ibnr claim reserves include provisions for incurred but not reported claims and a provision for reopened claims for our disability products . the ibnr and reopened claim reserves for our disability products are developed and maintained in aggregate based on historical monitoring that has only been on a combined basis . replace_table_token_4_th 35 replace_table_token_5_th key assumptions the calculation of policy and claim reserves involves numerous assumptions , but the primary assumptions used to calculate reserves are ( 1 ) the discount rate , ( 2 ) the claim resolution rate , and ( 3 ) the claim incidence rate for policy reserves and ibnr claim reserves . of these assumptions , our discount rate and claim resolution rate assumptions have historically had the most significant effects on our level of reserves because many of our product lines provide benefit payments over an extended period of time . 1. the discount rate , which is used in calculating both policy reserves and incurred and ibnr claim reserves , is the interest rate that we use to discount future claim payments to determine the present value . a higher discount rate produces a lower reserve . if the discount rate is higher than our future investment returns , our invested assets will not earn enough investment income to support our future claim payments . in this case , the reserves may eventually be insufficient . we set our assumptions based on our current and expected future investment yield of the assets supporting the reserves , considering current and expected future market conditions . if the investment yield on new investments that are purchased is below or above the investment yield of the existing investment portfolio , it is likely that the discount rate assumption on claims will be established to reflect the effect of the new investment yield . 2. the claim resolution rate , used for both policy reserves and incurred and ibnr claim reserves , is the probability that a disability or long-term care claim will close due to recovery or death of the insured . it is important because it is used to estimate how long benefits will be paid for a claim . estimated resolution rates that are set too high will result in reserves that are lower than they need to be to pay the claim benefits over time . claim resolution assumptions involve many factors , including the cause of disability , the policyholder 's age , the type of contractual benefits provided , and the time since initially becoming disabled . we primarily use our own claim experience to develop our claim resolution assumptions . these assumptions are established for the probability of death and the probability of recovery from disability . our studies review actual claim resolution experience over
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | issuance of debt in august 2012 , we issued $ 250.0 million of unsecured senior notes in a public offering . these notes , due 2042 , bear interest at a fixed rate of 5.75 % and are payable semi-annually . the notes are callable at or above par and rank equally in right of payment with all of our other unsecured and unsubordinated debt . the balance outstanding on these notes was $ 250.0 million at december 31 , 2012. in 2010 , we issued $ 400.0 million of unsecured senior notes in a public offering . these notes , due in 2020 , bear interest at a fixed rate of 5.625 % and are payable semi-annually . the notes are callable at or above par and rank equally in right of payment with all of our other unsecured and unsubordinated debt . in addition , these notes are effectively subordinated to any indebtedness of our subsidiaries . the balance outstanding on these notes was $ 400.0 million at december 31 , 2012. in 2009 , we issued $ 350.0 million of unsecured senior notes in a public offering . these notes , due in 2016 , bear interest at a fixed rate of 7.125 % and are payable semi-annually . the notes are callable at or above par and rank equally in right of payment with all of our other unsecured and unsubordinated debt . the balance outstanding on these notes was $ 350.0 million at december 31 , 2012. in 2007 , northwind holdings issued $ 800.0 million floating rate , insured , senior , secured notes , due 2037 , in a private offering . recourse for the payment of principal , interest , and other amounts due on the notes will be limited to the collateral for the notes and other assets of northwind holdings , consisting primarily of the stock of its sole subsidiary northwind re , a vermont special purpose financial captive insurance company . northwind holdings ' ability to meet its payment obligations under the notes will be dependent principally upon its receipt of dividends from northwind re .
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we announced a new licensing agreement with the medicines patent pool ( mpp ) , a united nations-backed public health organization , to expand access to bic . through this agreement , mpp can sub-license rights to bic to generic drug companies in india , china and south africa to manufacture therapies containing bic for distribution in certain low- and middle-income countries . china food and drug administration approved sovaldi for the treatment of hcv infection . sovaldi was approved for the treatment of adults and adolescents ( aged 12 to 18 years ) infected with hcv genotypes 1 , 2 , 3 , 4 , 5 or 6 as a component of a combination antiviral treatment regimen . sovaldi is our first hcv medicine approved in china . fda approved expanded labeling for epclusa , the first all-oral , pan-genotypic , once-daily single tablet regimen for the treatment of adults with hcv infection , to include use in patients co-infected with hiv . european commission extended marketing authorization for harvoni to include the treatment of hcv infection in adolescents infected with genotype 1 , 3 , 4 , 5 or 6. harvoni is the first daa regimen to receive marketing authorization in the european union extended for use in the adolescent population . 42 fda approved supplemental indications for harvoni and sovaldi for the treatment of hcv infection in adolescents without cirrhosis or with compensated cirrhosis , 12 years of age and older , or weighing at least 35 kilograms . harvoni was approved for pediatric patients with genotype 1 , 4 , 5 or 6 hcv infection . sovaldi was approved for pediatric patients with genotype 2 or 3 hcv infection , in combination with ribavirin . acquisitions in october 2017 , we completed a tender offer for all of the outstanding common stock of kite pharma , inc. ( kite ) for $ 180 per share in cash , or approximately $ 11.2 billion , excluding approximately $ 0.7 billion relating to the portion of the replaced stock-based awards attributable to the post combination period . we financed the transaction with $ 3.0 billion aggregate principal amount in senior unsecured notes issued in september 2017 , a $ 6.0 billion aggregate principal amount term loan facility credit agreement entered into in september 2017 and drawn in october 2017 , of which $ 1.5 billion was repaid in december 2017 , as well as cash on hand . kite 's cell therapies express either a chimeric antigen receptor ( car ) or an engineered t cell receptor , depending on the type of cancer . the acquisition resulted in kite becoming our wholly-owned subsidiary and established us as a leader in cellular therapy . through the kite acquisition , we acquired axicabtagene ciloleucel , a car t cell therapy . in october 2017 , we received approval from fda for axicabtagene ciloleucel , now known commercially as yescarta , making it the first car t cell therapy for the treatment of adult patients with relapsed or refractory large b-cell lymphoma after two or more lines of systemic therapy , which includes diffuse large b-cell lymphoma , transformed follicular lymphoma and primary mediastinal b-cell lymphoma . we have also filed a marketing authorization application for axicabtagene ciloleucel for the treatment of the same indications with ema , representing the first known submission in europe for a car t cell therapy . approval in europe is expected in the first half of 2018 , although there can be no assurance that we will receive such approval on a timely basis or at all . in addition to axicabtagene ciloleucel , we also acquired therapy candidates in clinical trials in both hematologic cancers and solid tumors , including kite-585 , a car t cell therapy candidate that targets b-cell maturation antigen expressed in multiple myeloma . in december 2017 , we acquired all of the issued and outstanding stock of cell design labs , inc. ( cell design labs ) , a privately held company , which was in addition to the approximately 12.2 % of shares in cell design labs we obtained in the acquisition of kite . with this acquisition , we gained new technology platforms that will enhance research and development efforts in cellular therapy . see note 5 , acquisitions of the notes to consolidated financial statements included in item 8 of this annual report on form 10-k for additional information regarding the acquisition of kite and cell design labs . 2017 financial highlights during 2017 , total revenues decreased to $ 26.1 billion and total product sales decreased to $ 25.7 billion , compared to $ 30.4 billion and $ 30.0 billion in 2016 , respectively , primarily due to the competitive dynamics of the hcv market , which lowered sales of our hcv products , partially offset by higher sales of our hiv products . in the united states , product sales were $ 18.1 billion in 2017 , compared to $ 19.3 billion in 2016 . in europe , product sales were $ 5.0 billion in 2017 , compared to $ 6.1 billion in 2016 . sales in other international locations were $ 2.6 billion in 2017 , compared to $ 4.6 billion in 2016 . research and development ( r & d ) expenses decreased 27 % to $ 3.7 billion for 2017 compared to 2016 , primarily due to the 2016 impacts of business development activities resulting in up-front collaboration expense related to our license and collaboration agreement with galapagos nv ( galapagos ) and acquired in-process r & d ( ipr & d ) expense related to our purchase of nimbus apollo , inc. ( nimbus ) , ipr & d impairment charges and ongoing milestone payments , partially offset by acquired ipr & d expense related to our purchase of cell design labs in 2017. selling , general and administrative ( sg & a ) expenses increased 14 % to story_separator_special_tag tdf-based regimens - stribild , complera/eviplera , atripla , truvada and viread product sales of these tdf-based regimens were $ 8.0 billion , $ 10.7 billion and $ 11.0 billion in 2017 , 2016 and 2015 , respectively , and accounted for 34 % , 39 % and 36 % of our total antiviral product sales for 2017 , 2016 and 2015 , respectively . in 2017 , product sales were $ 5.3 billion in the united states , $ 1.9 billion in europe and $ 805 million in other international locations . in 2016 , product sales were $ 7.2 billion in the united states , $ 2.6 billion in europe and $ 882 million in other international locations . in 2015 , product sales were $ 7.1 billion in the united states , $ 3.0 billion in europe and $ 881 million in other international locations . in the united states , the decreases in 2017 compared to 2016 were primarily due to lower sales volume as a result of the continued uptake of our taf-based regimens , partially offset by the increased usage of truvada for prep . in europe , the decreases in 2017 compared to 2016 were primarily due to lower sales volume as a result of the availability of generic viread and truvada in several countries and the continued uptake of our taf-based regimens . in the united states , the increases in 2016 compared to 2015 were primarily due to a favorable revision to our rebate reserves of $ 312 million relating to stribild and complera in the third quarter of 2016. in europe , the decreases in 2016 compared to 2015 were primarily due to lower sales volume as a result of the continued uptake of our taf-based regimens . royalty , contract and other revenues the following table summarizes the period over period changes in our royalty , contract and other revenues : replace_table_token_6_th 47 royalty , contract and other revenues in 2017 were up slightly compared to the same period in 2016 , and decreased by 10 % in 2016 , compared to $ 488 million in 2015 . the decrease in 2016 compared to 2015 was primarily due to royalty revenues from f. hoffman-la roche ltd for sales of tamiflu . cost of goods sold and product gross margin the following table summarizes the period over period changes in our product sales , cost of goods sold and product gross margin : replace_table_token_7_th the decreases in our product gross margin in 2017 compared to 2016 and in 2016 compared to 2015 were primarily due to changes in product mix , as our hcv product sales decreased as a percentage of total product sales . research and development expenses the following table summarizes the period over period changes in r & d expenses : replace_table_token_8_th r & d expenses summarized above consisted primarily of clinical studies performed by contract research organizations , materials and supplies , licenses and fees , up-front payments under collaboration agreements , milestone payments , personnel costs , including salaries , benefits and stock-based compensation and overhead allocations consisting of various support and facilities-related costs . we do not track total r & d expenses by product candidate , therapeutic area or development phase . however , we manage our r & d expenses by identifying the r & d activities we anticipate will be performed during a given period and then prioritizing efforts based on scientific data , probability of successful development , market potential , available human and capital resources and other considerations . we continually review our r & d pipeline and the status of development and , as necessary , reallocate resources among the r & d portfolio that we believe will best support the future growth of our business . the following table provides a breakout of r & d expenses by major cost type : replace_table_token_9_th in 2017 , r & d expenses decreased $ 1.4 billion or 27 % , compared to 2016 , primarily due to the 2016 impacts of business development activities resulting in up-front collaboration expense related to our license and collaboration agreement with galapagos and acquired ipr & d expense related to our purchase of nimbus , ipr & d impairment charges and ongoing milestone payments , partially offset by acquired ipr & d expense related to our purchase of cell design labs in 2017. in 2016 , r & d expenses increased $ 2.1 billion or 69 % , compared to 2015 , primarily due to the overall progression of clinical studies , including ongoing milestone payments , our purchase of an fda priority review voucher , up-front collaboration expenses related to our license and collaboration agreement with galapagos and acquired ipr & d expense related to our purchase of nimbus . ipr & d impairment charges were a result of termination of clinical development for momelotinib and simtuzumab . 48 selling , general and administrative expenses the following table summarizes the period over period changes in sg & a expenses : replace_table_token_10_th sg & a expenses relate to sales and marketing , finance , human resources , legal and other administrative activities . expenses consist primarily of personnel costs , facilities and overhead costs , outside marketing , advertising and legal expenses , and other general and administrative costs . sg & a expenses also include the bpd fee . in the united states , we , along with other pharmaceutical manufacturers of branded drug products , are required to pay a portion of the bpd fee , which is estimated based on select government sales during each calendar year as a percentage of total industry government sales and is trued-up upon receipt of invoices from the internal revenue service ( irs ) . in 2017 , sg & a expenses increased $ 480 million or 14 % compared to 2016 , primarily due to costs associated with our acquisition of kite ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources we believe that our existing capital resources , supplemented by our cash flows generated from operating activities will be adequate to satisfy our capital needs for the foreseeable future . the following table summarizes our cash , cash equivalents , and marketable securities and working capital ( in millions ) : replace_table_token_11_th cash , cash equivalents and marketable securities cash , cash equivalents and marketable securities totaled $ 36.7 billion at december 31 , 2017 , an increase of $ 4.3 billion or 13 % when compared to $ 32.4 billion at december 31 , 2016 . during 2017 , we generated $ 11.9 billion in operating cash flow and in connection with our acquisition of kite , we issued $ 3.0 billion aggregate principal amount of senior unsecured notes and entered into and drew on a $ 6.0 billion aggregate principal amount term loan facility credit agreement , of which $ 1.5 billion was repaid in december 2017. additionally , we paid cash dividends of $ 2.7 billion and utilized $ 954 million on stock repurchases . see note 5 , acquisitions of the notes to consolidated financial statements included in item 8 of this annual report on form 10-k for additional details on our acquisition of kite .
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fiscal 2011 , 2010 , and 2009 each had 52 weeks . 19 results of operations the following table summarizes the financial results for fiscal 2011 , 2010 , and 2009 : replace_table_token_5_th all share and per share amounts have been adjusted for the two-for-one stock split effective december 15 , 2011. stores . total stores open at the end of fiscal 2011 , 2010 , and 2009 were 1,125 , 1,055 , and 1,005 , respectively . the number of stores at the end of fiscal 2011 , 2010 , and 2009 increased by 7 % , 5 % , and 5 % from the respective prior years . our expansion strategy is to open additional stores based on market penetration , local demographic characteristics , competition , expected store profitability , and the ability to leverage overhead expenses . we continually evaluate opportunistic real estate acquisitions and opportunities for potential new store locations . we also evaluate our current store locations and determine store closures based on similar criteria . replace_table_token_6_th sales . sales for fiscal 2011 increased $ 742.2 million , or 9.4 % , compared to the prior year due to the opening of 70 net new stores during 2011 , and a 5 % increase in sales from comparable stores ( defined as stores that have been open for more than 14 complete months ) . sales for fiscal 2010 increased $ 681.9 million , or 9.5 % , compared to the prior year due to the opening of 50 net new stores during 2010 , and a 5 % increase in sales from comparable stores . 20 our sales mix is shown below for fiscal 2011 , 2010 , and 2009 : replace_table_token_7_th we intend to address the competitive climate for off-price apparel and home goods by pursuing and refining our existing strategies and by continuing to strengthen our organization , to diversify our merchandise mix , and to more fully develop our organization and systems to improve regional and local merchandise offerings . although our strategies and store expansion program contributed to sales gains in fiscal 2011 , 2010 , and 2009 , we can not be sure that they will result in a continuation of sales growth or in an increase in net earnings . cost of goods sold . cost of goods sold in fiscal 2011 increased $ 511.0 million compared to the prior year mainly due to increased sales from the opening of 70 net new stores during the year , and a 5 % increase in sales from comparable stores . cost of goods sold as a percentage of sales for fiscal 2011 decreased approximately 35 basis points from the prior year . this improvement was mainly the result of a 50 basis point increase in merchandise gross margin , which included a 15 basis point benefit from lower shortage . in addition , occupancy leveraged 20 basis points . these improvements were partially offset by increases in freight costs of about 20 basis points , distribution expenses of about 10 basis points , and buying costs of about five basis points . cost of goods sold in fiscal 2010 increased $ 402.5 million compared to the prior year mainly due to increased sales from the opening of 50 net new stores during the year , and a 5 % increase in sales from comparable stores . cost of goods sold as a percentage of sales for fiscal 2010 decreased approximately 130 basis points from the prior year . this improvement was mainly the result of an 80 basis point increase in merchandise gross margin , which included a 15 basis point benefit from lower shortage . in addition , occupancy leveraged 30 basis points , and distribution costs declined by about 30 basis points . these improvements were partially offset by an increase in freight costs of about 10 basis points . we can not be sure that the gross profit margins realized in fiscal 2011 , 2010 , and 2009 will continue in future years . selling , general and administrative expenses . for fiscal 2011 , selling , general and administrative expenses ( sg & a ) increased $ 74.3 million compared to the prior year , mainly due to increased store operating costs reflecting the opening of 70 net new stores during the year . sg & a as a percentage of sales for fiscal 2011 decreased by approximately 50 basis points compared to the prior year due equally to a combination of leverage on both general and administrative and store operating expenses . for fiscal 2010 , sg & a increased $ 99.0 million compared to the prior year , mainly due to increased store operating costs reflecting the opening of 50 net new stores during the year . sg & a as a percentage of sales for fiscal 2010 decreased by approximately 10 basis points compared to the prior year mainly driven by leverage on store operating expenses . the largest component of sg & a is payroll . the total number of employees , including both full and part-time , as of fiscal year end 2011 , 2010 , and 2009 was approximately 53,900 , 49,500 , and 45,600 , respectively . 21 interest expense ( income ) , net . in fiscal 2011 , interest expense increased by $ 0.3 million primarily due to issuance costs for our revolving credit facility , while interest income decreased by $ 0.4 million primarily due to lower investment yields as compared to the prior year . as a percentage of sales , net interest expense in fiscal 2011 remained flat compared to the prior year . the table below shows interest expense and income for fiscal 2011 , 2010 , and 2009 : replace_table_token_8_th taxes on earnings . story_separator_special_tag packaway inventory accounted for approximately 49 % and 47 % of total inventories as of january 28 , 2012 and january 29 , 2011. merchandise inventory includes acquisition , processing , and storage costs related to packaway inventory . included in the carrying value of our merchandise inventory is a provision for shortage . the shortage reserve is based on historical shortage rates as evaluated through our annual physical merchandise inventory counts and cycle counts . if actual market conditions , markdowns , or shortage are less favorable than those projected by us , or if sales of the merchandise inventory are more difficult than anticipated , additional merchandise inventory write-downs may be required . long-lived assets . we record a long-lived asset impairment charge when events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable based on estimated future cash flows . an impairment loss would be recognized if analysis of the undiscounted cash flow of an asset group was less than the carrying value of the asset group . if our actual results differ materially from projected results , an impairment charge may be required in the future . in the course of performing our annual analysis , we determined that no long-lived asset impairment charge was required for fiscal 2011 , 2010 , or 2009 . 27 depreciation and amortization expense . property and equipment are stated at cost , less accumulated depreciation and amortization . depreciation is calculated using the straight-line method over the estimated useful life of the asset , typically ranging from five to 12 years for equipment and 20 to 40 years for land improvements and buildings . the cost of leasehold improvements is amortized over the lesser of the useful life of the asset or the applicable lease term . lease accounting . when a lease contains rent holidays or requires fixed escalations of the minimum lease payments , we record rental expense on a straight-line basis over the term of the lease and the difference between the average rental amount charged to expense and the amount payable under the lease is recorded as deferred rent . we begin recording rent expense on the lease possession date . tenant improvement allowances are included in other long-term liabilities and are amortized over the lease term . changes in tenant improvement allowances are included as a component of operating activities in the consolidated statements of cash flows . insurance obligations . we use a combination of insurance and self-insurance for a number of risk management activities , including workers ' compensation , general liability , and employee-related health care benefits . our self-insurance and deductible liability is determined actuarially , based on claims filed and an estimate of claims incurred but not reported . should a greater amount of claims occur compared to what is estimated or the costs of medical care increase beyond what was anticipated , our recorded reserves may not be sufficient and additional charges could be required . stock-based compensation . we recognize compensation expense based upon the grant date fair value of all stock-based awards . we use historical data to estimate pre-vesting forfeitures and to recognize stock-based compensation expense . all stock-based compensation awards are expensed over the service or performance periods of the awards . income taxes . we account for our uncertain tax positions in accordance with accounting standards codification ( asc ) 740. we are required to make assumptions and judgments regarding our income tax exposures . our policy is to recognize interest and or penalties related to all tax positions in income tax expense . to the extent that accrued interest and penalties do not ultimately become payable , amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period that such determination is made . the critical accounting policies noted above are not intended to be a comprehensive list of all of our accounting policies . in many cases , the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles ( gaap ) , with no need for management 's judgment in their application . there are also areas in which management 's judgment in selecting one alternative accounting principle over another would not produce a materially different result . see our audited consolidated financial statements and notes thereto under item 8 in this annual report on form 10-k , which contain accounting policies and other disclosures required by gaap . effects of inflation or deflation . we do not consider the effects of inflation or deflation to be material to our financial position and results of operations . new accounting pronouncements in may 2011 , the fasb issued accounting standards update no . 2011-04 , fair value measurements ( topic 820 ) : amendments to achieve common fair value measurement and disclosure requirements in u.s. gaap and ifrss , ( asu 2011-04 ) . asu 2011-04 changes the wording used to describe many of the requirements in u.s. gaap for measuring fair value and for disclosing information about fair value measurements to ensure consistency between u.s. gaap and ifrs . asu 2011-04 also expands the disclosures required for fair value measurements . asu 2011-04 is to be applied prospectively and is effective for the company in fiscal 2012. we believe adoption of this guidance will not have a material impact on our consolidated financial statements . in june 2011 , the fasb issued accounting standards update no . 2011-05 , comprehensive income ( topic 220 ) : presentation of comprehensive income , ( asu 2011-05 ) . asu 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in equity . asu 2011-05 requires that all nonowner changes in stockholders ' equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements . this
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources our primary sources of funds for our business activities are cash flows from operations and short-term trade credit . our primary ongoing cash requirements are for merchandise inventory purchases , payroll , rent , taxes , capital expenditures in connection with opening new stores , and investments in distribution centers and information systems . we also use cash to repurchase stock under our stock repurchase program and to pay dividends . replace_table_token_9_th 22 operating activities net cash provided by operating activities was $ 820.1 million , $ 673.0 million , and $ 888.4 million in fiscal 2011 , 2010 , and 2009 , respectively . the primary sources of cash provided by operating activities in fiscal 2011 , 2010 , and 2009 were net earnings excluding non-cash expenses for depreciation and amortization . our primary source of operating cash flow is the sale of our merchandise inventory . we regularly review the age and condition of our merchandise and are able to maintain current merchandise inventory in our stores through replenishment processes and liquidation of slower-moving merchandise through clearance markdowns . net cash from operations increased in 2011 compared to 2010 primarily due to higher net earnings and lower working capital used to purchase additional packaway inventory . we expect to continue to take advantage of packaway inventory opportunities to deliver bargains to our customers . as a regular part of our business , packaway inventory levels will vary over time based on availability of compelling opportunities in the marketplace . packaway merchandise is purchased with the intent that it will be stored in our warehouses until a later date . the timing of the release of packaway inventory to our stores is principally driven by the product mix and seasonality of the merchandise , and its relation to the company 's store merchandise assortment plans . as such , the aging of packaway varies by merchandise category and seasonality of purchase , but typically packaway remains in storage less than six months . changes in packaway inventory levels impact our operating cash flow .
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correction of immaterial errors in the fourth quarter of 2011 , management discovered prior period tax errors related mainly to transfer pricing . the cumulative adjustment for the tax errors covering the period from february 1 , 2007 to january 31 , 2011 , was approximately $ 315 thousand . the adjustment applicable to the fourth quarter of 2010 was approximately $ 135 thousand and the adjustment applicable to prior years ( february 2007 - january 2010 ) totaled approximately $ 180 thousand . pursuant to the guidance of sec staff accounting bulletin ( `` sab `` ) no . 99 , materiality , the company concluded that the errors were not material to any of its prior period financial statements . however , in accordance with sab no . 108 , considering the effects of prior year misstatements when quantifying misstatements in the current year financial statements , the prior period financial statements were revised . prior period amounts stated in this form 10-k have been revised to facilitate comparability between current and prior year periods . for further information , see note 7 correction of immaterial errors - in the notes to consolidated financial statements . 2011 compared to 2010 net sales were $ 233.5 million in 2011 , an increase of 7 % from $ 219 million in 2010 . sales increased in filtration products , industrial process cooling and hvac . piping systems ' sales declined due to reduced activity at the u.a.e . facility and no large project related revenue at the india facility . gross profit of $ 36 million in 2011 decreased 18 % from $ 44 million in 2010 . gross margin was 16 % compared to 20 % in 2010 . gross profit increased significantly in filtration products , industrial process cooling and hvac due to increased sales volume and margin improvements . piping systems ' gross profit decreased considerably to $ 14.4 million in 2011 from $ 27.3 million in 2010 due to lower volume at the u.a.e . facility and no large project related activity at the india facility . in the second quarter , piping systems also incurred a one-time extended service claim of approximately $ 0.6 million . general and administrative expenses decreased 6 % to $ 26.3 million from $ 28 million . the reduction was mainly due to lower profit-based management incentive compensation expense , lower stock compensation expense and lower legal expenses partially offset by start-up costs for piping systems ' new facility in saudi arabia . selling expenses increased 11 % to $ 15.1 million from $ 13.6 million . a change in piping systems ' domestic sales commission program resulted in increased sales commission expense , additional sales in industrial process cooling led to higher commission expense and higher healthcare costs were partially offset by reduced costs from closing the facility in south africa recorded in 2010. the company 's worldwide effective income tax rates , ( `` etr `` ) , for 2011 and 2010 were ( 0.3 ) % and ( 67.0 ) % , respectively . for additional information , see the income tax section of the md & a and see note 8 - income taxes in the notes to the financial statements . net loss was $ 5 million compared to net income of $ 4.4 million in 2010. this change is mainly the result of lower volume at the u.a.e . facility and no large project related activity at the india facility . furthermore piping systems incurred expenses of $ 1.0 million for the fourth quarter and $ 2.3 million for 2011 relating to the new start-up facility in saudi arabia . piping systems the adverse effect of the credit crisis experienced by the emirate of dubai has significantly decelerated construction activity both in the u.a.e . and across other gcc countries , negatively impacting sales volume at the u.a.e . facility . the manufacturing facility in dammam , saudi arabia is production ready and staff has been recruited and trained . initial customer orders have been received , technical submittals are awaiting approval and procurement of raw materials is currently underway . expenses of $ 1.0 million for the fourth quarter and $ 2.3 million for 2011 relating to this new start-up facility were recorded to cost of goods sold , general and administrative and selling expenses . piping systems ' domestic sales and earnings are seasonal , typically lower during the fourth and first quarters due to unfavorable weather for construction over much of north america and are correspondingly higher during the second and third quarters . replace_table_token_3_th despite significant sales drops in the middle east and india , net sales of $ 97 million decreased only 7 % from $ 104.6 million , in the prior-year due to reduced activity at the u.a.e . facility and no large project related revenue at the india facility , partially offset by a rise in domestic oil and gas product sales . gross margin decreased to 15 % of net sales from 26 % of net sales in the prior-year due to lower volume at the u.a.e . facility and no large project related activity at the india facility . in the second quarter , piping systems incurred a one-time extended service claim of approximately $ 0.6 million . general and administrative expense decreased to $ 9 million or 9.5 % of net sales in 2011 from $ 10 million or 9.9 % of net sales in 2010 . the reduction in general and administrative expenses was due to lower profit based management incentive compensation , legal expenses and reduced staffing at the u.a.e . location , partially offset by increased healthcare costs . selling expense increased to $ 4 million or 4 % of net sales in 2011 from $ 3 million or 3 % of net sales in 2010 . story_separator_special_tag the excess foreign tax credits are subject to a ten-year carryforward and will expire in 2022. during 2011 , the company reevaluated the need for a valuation allowance against deferred tax assets and determined that no reserve was needed . as of january 31 , 2011 and january 31 , 2012 , no valuation allowance was deemed necessary on all domestic deferred tax assets except for certain state net operating losses , ( `` nol `` ) . the company believes that it will be more likely than not that the research and development credits will be utilized within the next five years ; therefore , the company has released the valuation allowance of $ 0.8 million for the $ 1.3 million research and development credits established in 2009. another contributing factor to the unusual etr is the valuation allowance set up on the nol in saudi arabia . the company does not record a tax benefit for its start-up entities . as of january 31 , 2012 , the company had undistributed earnings of foreign subsidiaries for which deferred taxes have not been provided . the company intends and has the ability to reinvest these earnings for the foreseeable future outside the u.s. if these amounts were distributed to the u.s. , in the form of dividends or otherwise , the company would be subject to additional u.s. income taxes . determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability , if any , is dependent on circumstances existing if and when remittance occurs . a reconciliation of the etr to the u.s. statutory tax rate is as follows : replace_table_token_6_th for further information , see note 8 - income taxes in the notes to consolidated financial statements . liquidity and capital resources story_separator_special_tag style= `` font-family : inherit ; font-size:11pt ; color : # 000000 ; text-decoration : none ; `` > $ 3.8 million remained unused . critical accounting estimates and policies the company 's significant accounting policies are discussed in the notes to the consolidated financial statements included in item 8 of this annual report on form 10-k. the application of certain of these policies requires significant judgments or a historical based estimation process that can affect the results of operations and financial position of the company as well as the related footnote disclosures . the company bases its estimates on historical experience and other assumptions that it believes are reasonable . if actual amounts ultimately differ from previous estimates , the revisions are included in the company 's results of operations for the period in which the actual amounts become known . revenue recognition . the company recognizes revenues including shipping and handling charges billed to customers , when all the following criteria are met : ( i ) persuasive evidence of an arrangement exists , ( ii ) the seller 's price to the buyer is fixed or determinable , and ( iii ) collectability is reasonably assured . all subsidiaries of the company , except as noted below , recognize revenues upon shipment or delivery of goods or services when title and risk of loss pass to customers . percentage of completion method revenue recognition . all divisions recognize revenues under the above stated revenue recognition policy except for sizable complex contracts that require periodic recognition of income . for these contracts , the company uses the `` percentage of completion `` accounting method . under this approach , income is recognized in each reporting period based on the status of the uncompleted contracts and the current estimates of costs to complete . the choice of accounting method is made at the time the contract is received based on the expected length and complexity of the project . the percentage of completion is determined by the relationship of costs incurred to the total estimated costs of the contract . provisions are made for estimated losses on uncompleted contracts in the period in which such losses are determined . changes in job performance , job conditions , and estimated profitability , including those arising from contract penalty provisions and final contract settlements , may result in revisions to costs and income . such revisions are recognized in the period in which they are determined . claims for additional compensation due the company are recognized in contract revenues when realization is probable and the amount can be reliably estimated . inventories . inventories are stated at the lower of cost or market . cost is determined using the first-in , first-out method for all inventories . income taxes . deferred income taxes have been provided for temporary differences arising from differences in the basis of assets and liabilities for tax and financial reporting purposes . deferred income taxes on temporary differences have been recorded at the current tax rate . the company assesses its deferred tax assets for realizability at each reporting period . the company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit . for tax positions meeting the more 16 likely than not threshold , the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority . equity-based compensation . stock compensation expense for employee equity awards is recognized ratably over the requisite service period of the award . the black-scholes option-pricing model is utilized to estimate the fair value of awards . determining the fair value of stock options using the black-scholes model requires judgment , including estimates for ( 1 ) risk-free interest rate - an estimate based on the yield of zero-coupon treasury securities with a maturity equal to the expected life of the option ; ( 2 ) expected volatility - an estimate based on the historical volatility of the
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash and cash equivalents as of january 31 , 2012 were $ 4.2 million as compared to $ 16.7 million at january 31 , 2011 . the decrease was primarily for the new facility in saudi arabia . the company 's working capital was $ 43 million at january 31 , 2012 compared to $ 59 million at january 31 , 2011 . cash used in operations in 2011 was $ 0.2 million compared to cash provided by operations of $ 8.7 million at january 31 , 2011 . in july 2011 , the company recorded a one-time $ 1.8 million tax expense associated with a $ 3.1 million repatriation of foreign earnings . this tax expense included a payment of $ 0.5 million to the foreign tax authority and an accrual of $ 1.3 million u.s. tax on foreign source income . no cash will be paid for this tax in the u.s. since the company has a net operating loss carryforward for fed eral income taxes . the company does not intend to repatriate remaining unremitted foreign earnings and anticipates reinvesting these earnings overseas to fund current working capital requirements and expansion in foreign markets . if the company repatriates unremitted foreign earnings , it will have negative tax implications . 14 net cash used in investing activities in 2011 included $ 10 million for capital expenditures , primarily for machinery and equipment in piping systems of which $ 6.6 million was related to the new plant in saudi arabia . the company estimates that capital expenditures for 2012 will be approximately $ 8 million , of which the company may finance capital expenditures through real estate mortgages , equipment financing loans , internally generated funds and its revolving line of credit . the majority of such expenditures relates to foreign growth within piping systems . debt totaled $ 37.4 million at january 31 , 2012 , a decrease of $ 2 million since january 31 , 2011 . net cash used by financing activities was $ 1.9 million .
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further , the impacts of a potential worsening of economic conditions and the continued disruptions to , and volatility in , the credit and financial markets , and consumer spending , as well as other unanticipated consequences , remain unknown . the sections below summarize the typical factors that impact our results of operations , including the actual and potential impacts of the covid-19 pandemic on our results of operations , liquidity and capital resources , during the year ended december 31 , 2020 , as well as management 's view of potential impacts on our future results of operations , liquidity and capital resources . for more discussion on the risks associated with the covid-19 outbreak , see item 1a . “ risk factors ” . 54 factors that impact our result of operations our results of operations and financial condition are affected by numerous factors , many of which are beyond our control . key factors that typically impact our results of operations and financial condition , which may be exacerbated by the covid-19 pandemic , include rental rates and collections , property dispositions , lease renewals and occupancy , acquisition activity , net lease terms , interest expense , general and administrative expenses , tenant bankruptcies , and impairments . rental rates and collections our financial results depend on our ability to timely collect contractual rents due under our long-term net leases . the covid-19 pandemic 's impact on us has primarily manifested through tenant requests for rent relief . in total , we granted partial rent relief requests to 15 tenants related to 93 properties . we evaluated each request for rent relief as a unique situation , employing a rigorous credit and business analysis focusing on , among other things , industry circumstances , the tenant 's financial performance , liquidity position , lease structure , and geographic location , and regulatory impacts on the tenant 's operations ( e.g . , stay-at-home orders , essential v. nonessential business designations ) . based on our analyses , we granted relief on a select basis only to those tenants we determined to be most in need . in cases where we granted rent relief , we focused on negotiating the shortest possible repayment period and , when possible , lease enhancements ( e.g . extensions of term ) . there were several tenants who requested rent relief that we believed were well positioned to continue making rent payments during the pandemic . many of those tenants had strong balance sheets and liquidity positions , had applied for or received paycheck protection program loan funding under the cares act , or were designated as essential businesses and could continue to operate despite restrictions on other businesses . we declined to agree to any rent relief in those circumstances , and in all such cases the tenants continued to pay all rents due as of december 31 , 2020. the rent relief requests we granted included partial deferral of payment of rent with 14 tenants , and a partial abatement of rent with one tenant . as of december 31 , 2020 , all deferral periods have ended , and the balance of rent deferrals yet to be repaid was less than $ 1 million . the abatement period ended subsequent to year-end in january 2021. in circumstances where we agreed to a rent deferral that is to be repaid over a period of time , and where the terms of the lease and amounts paid under the lease were substantially the same , we continued to recognize the same amount of gaap lease revenue each period to the extent the amounts were probable of collection . the amounts we agreed to defer impacted our cash flows from operations . the following chart summarizes our 2020 rent collections : replace_table_token_13_th despite our continued strong rent collections subsequent to the outbreak of the covid-19 pandemic , the duration of the pandemic and the potential ongoing impacts of the virus on our tenants ' ability to conduct their business should additional governmental restrictions be implemented , could have a significant negative impact on our ability to continue to collect future rents . property dispositions from time to time , we strategically dispose of properties , primarily when we believe the risk profile has changed and become misaligned with our then current risk-adjusted return objectives . the resulting gains or losses on dispositions may materially impact our operating results , and the recognition of a gain or loss on the sale of real estate varies from transaction to transaction based on fluctuations in asset prices and demand in the real estate market at the time a property is listed for sale . as a result of the covid-19 pandemic , we have seen a slowdown in real estate transactions and weakening market conditions for several property types resulting from an increase in vacant rental space . although we were able to dispose of properties during the year ended december 31 , 2020 at advantageous prices , in the short term , the slowdown in market activity may inhibit our ability to further dispose of properties we have identified for disposition , including those leased by tenants that experience significant credit deterioration as a result of the covid-19 pandemic , and the price at which we are able to sell the properties may be negatively impacted . we will continue to monitor the pandemic 's impact and continue to selectively dispose of properties when advantageous to do so . story_separator_special_tag these borrowings were unhedged and bore interest at a variable rate based on libor , which decreased from 1.76 % at december 31 , 2019 to 0.14 % at december 31 , 2020. as a result , we benefited from declining interest rates during the period of time they were outstanding . the borrowings were fully repaid in september 2020 with proceeds from our ipo . 59 gain on sale of real estate our recognition of a gain or loss on the sale of real estate varies from transaction to transaction based on fluctuations in asset prices and demand in the real estate market . during the year ended december 31 , 2020 , we recognized gains of $ 15.0 million on the sale of 24 properties , compared to gains of $ 29.9 million on the sale of 49 properties during the year ended december 31 , 2019. there was an increase in the sale of properties during 2019 as a result of our deleveraging plans following the significant industrial and office portfolio acquisition in august 2019. the decrease in the sale of properties during 2020 was a result of a shift in our deleveraging to employ proceeds from the ipo , rather than gains on sales of properties , to reduce leverage , as well as a general decrease in market activity resulting from the covid-19 pandemic in 2020. income taxes the decrease in income taxes during 2020 is mainly attributable to federal and state taxes paid in 2019 by our taxable reit subsidiary as a result of our deleveraging plans subsequent to our significant industrial and office portfolio acquisition in august 2019. change in fair value of earnout liability as part of the internalization we may be required to pay additional earnout consideration if certain milestones are achieved during the earnout periods . during 2020 , we recorded the fair value of this contingent consideration in the consolidated balance sheets , and updated the fair value at the end of each reporting period . to the extent the change in fair value relates to a portion of the earnout consideration that is classified as a liability , we record the change through earnings . we estimate the fair value of the earnout liability by considering weighted-average probabilities of likely outcomes , and using a monte carlo simulation and discounted cash flow analysis to estimate fair value . these estimates require the company to make various assumptions about future share prices , and other items that are unobservable and are considered level 3 inputs in the fair value hierarchy . the change in the fair value of the earnout liability during the year ended december 31 , 2020 , reflects changes in share prices and our peer stock price volatility assumption , which are attributable to changes in economic circumstances impacting global equity markets . net income and net earnings per diluted share replace_table_token_18_th the decrease in net income for the year ended december 31 , 2020 , as compared to the year ended december 31 , 2019 , is primarily due to a $ 23.9 million increase in depreciation and amortization expense , a $ 15.6 million increase in impairment charges , a $ 14.9 million decrease in gains on sale of real estate , and a $ 3.6 million increase in interest expense . these factors were partially offset by revenue growth of $ 22.8 million and $ 1.8 million of income from the decrease in the fair value of our earnout liability in 2020 with no comparable adjustment in the prior year . in addition , as a result of the internalization , increased general and administrative expenses of $ 22.5 million were offset by $ 26.4 million lower asset management and property management fees . gaap net income includes items such as gain or loss on sale of real estate and provisions for impairment , among others , which can vary from quarter to quarter and impact period-over-period comparisons . these fluctuations , combined with the increase in our weighted average shares outstanding resulting from the common shares and op units issued in conjunction with the ipo and internalization , contributed to the $ 0.39 decrease in net earnings per diluted share for the year ended december 31 , 2020. liquidity and capital resources general we acquire real estate using a combination of debt and equity capital and with cash from operations that is not otherwise distributed to our stockholders . our focus is on maximizing the risk-adjusted return to our stockholders through an appropriate balance of debt and equity in our capital structure . we are committed to maintaining an investment grade balance sheet through active management of our leverage profile and overall liquidity position . we believe our leverage strategy has allowed us to take advantage of the lower cost of debt while simultaneously strengthening our balance sheet , as evidenced by our investment grade credit rating of baa3 from moody 's investors service ( “ moody 's ” ) , which was reaffirmed in july 2020 , and our initial credit rating of bbb from s & p in january 2021. we manage our leverage profile using a ratio of net debt to annualized adjusted ebitdare , a non-gaap financial measure , which we believe is a useful measure of our ability to repay debt and a relative measure of leverage , and is used in communications with lenders and with rating agencies regarding our credit rating . we seek to maintain on a sustained basis a net debt to annualized adjusted ebitdare ratio that is generally less than 6.0x . as of december 31 , 2020 , we had total debt outstanding of $ 1.5 billion , net debt of $ 1.4 billion , and a net debt to annualized adjusted ebitdare ratio of approximately 5.15x . 60 net debt and annualized adjusted ebitdare are non-gaap financial measures , and annualized adjusted ebitdare is calculated based upon ebitda , ebitdare
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | equity capital resources on september 21 , 2020 , we completed our ipo and issued 37 million shares of stock for net proceeds of $ 588.3 million , including shares issued subsequently pursuant to the underwriters ' partial exercise of their over-allotment option . we used $ 216.5 million of the net proceeds to fully repay the outstanding borrowings and accrued interest under our then existing revolving credit agreement and $ 240.2 million of the proceeds to fully repay the outstanding principal and accrued interest associated with an unsecured term loan . as we deploy our net proceeds from our successful ipo and continue to invest in accretive real estate properties , we expect to continue to balance our debt and equity capitalization , while maintaining a net debt to annualized adjusted ebitdare ratio below 6.0x on a sustained basis , through the anticipated use of follow-on equity offerings and an at-the-market ( “ atm ” ) program . prior to the ipo , equity capital for our real estate acquisition activity was provided by proceeds from our private offering , including distributions reinvested through our drip . we suspended our private offering on january 10 , 2020 , and did not raise any equity through our private offering during the year ended december 31 , 2020. during the year ended december 31 , 2020 , we raised approximately $ 5.9 million in equity capital through our drip . for the year ended december 31 , 2019 , we raised $ 394.4 million in equity capital , of which $ 329.8 million was received through new cash investments and $ 64.6 million was raised through our drip .
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as we identify indications of clinical activity in a particular tumor type , we will further test the combination 's efficacy and safety in expansion cohorts of approximately 20 patients . we began enrolling the first expansion cohort in december 2017 , treating patients with metastatic pancreatic cancer . we continue to explore opening cohorts in patients with other solid tumors . cortisol modulators to treat patients with crpc . we are conducting an open label phase 1/2 trial of our proprietary , selective cortisol modulator cort125281 combined with xtandi in patients with metastatic crpc at sites in the united states and europe . 31 development of our other selective cortisol modula tors we are conducting a phase 1 trial of the safety , tolerability and pharmacokinetics of our proprietary , selective cortisol modulator cort118335 . we plan to advance this compound to phase 2 as a potential treatment for antipsychotic-induced weight gain and nash . our portfolio of proprietary selective cortisol modulators contains more than 500 compounds . we plan to continue identifying new compounds and to advance the most promising of them towards the clinic . results of operations net product revenue – net product revenue is gross product revenue from sales to our customers less deductions for estimated government rebates . for the year ended december 31 , 2017 , we recorded $ 159.2 million in net product revenue , as compared to $ 81.3 million for the year ended december 31 , 2016 and $ 50.3 million for the year ended december 31 , 2015. the increases in net product revenue year over year were primarily driven by increases in our sales volume and price increases . these price increases represented approximately 16.6 percent and 32.1 percent of the increases in net revenue for the years ended december 31 , 2017 and 2016 , respectively . cost of sales – cost of sales includes the cost of api , tableting , packaging , personnel , overhead , stability testing and distribution . cost of sales was $ 3.6 million for the year ended december 31 , 2017 , as compared to $ 2.1 million in the corresponding period in 2016 and $ 1.4 million in the corresponding period in 2015. these increases were due to greater sales volumes , partially offset by reductions in our manufacturing costs . for the year ended december 31 , 2017 , cost of sales was 2.2 percent of our net product revenue , as compared to 2.5 percent in the corresponding period in 2016 and 2.7 percent in the corresponding period in 2015. cost of sales declined as a percentage of net product revenue for the years ended december 31 , 2017 and 2016 due to reduced manufacturing costs and increases in the price of korlym . research and development expenses – research and development expenses include the cost of ( 1 ) retaining and compensating development personnel , ( 2 ) clinical trials , ( 3 ) discovery research and pre-clinical studies , ( 4 ) drug product for use in clinical trials and to support regulatory submissions , ( 5 ) the development of drug formulations and manufacturing processes and ( 6 ) regulatory activities . research and development expenses increased to $ 40.4 million for the year ended december 31 , 2017 from $ 23.8 million in 2016 , an increase of 69 .3 percent , primarily due to the clinical advancement of relacorilant and the pre-clinical and clinical development of cort118335 and cort125281 , including the associated hiring of additional clinical development employees . research and development expenses increased to $ 23.8 million for the year ended december 31 , 2016 from $ 15.4 million in 2015 , an increase of 54.6 percent , primarily due to increased spending on the advancement of relacorilant , which entered clinical trials in patients in the second quarter of 2016 , and the hiring of additional clinical development employees . 32 below is a summary of our research and development expenses by major project : replace_table_token_4_th research and development expenses in 2018 and thereafter will depend on the outcomes of our pre-clinical and clinical trials and our development plans . we expect research and development spending in 2018 to be higher than it was in the corresponding period of 2017 as our programs advance and we begin new ones . it is difficult to predict the timing and cost of development activities , which are subject to many risks and uncertainties , including inconclusive results , slow patient enrollment , adverse side effects and unforeseen difficulties in the formulation or manufacture of study drugs and their real or perceived lack of efficacy or safety . clinical development is also subject to extensive government oversight and to regulations that may change in ways we can not anticipate . selling , general and administrative expenses – selling , general and administrative expenses include ( 1 ) compensation of employees , consultants and contractors engaged in commercial and administrative activities , ( 2 ) the cost of vendors that support commercial activities and ( 3 ) legal and accounting fees . selling , general and administrative expenses for the year ended december 31 , 2017 increased 38.0 percent to $ 62.4 million , from $ 45.2 million for the comparable period in 2016 . this increase was primarily due to the growth of our sales organization , higher performance bonus expense and increased professional services fees . selling , general and administrative expenses for the year ended december 31 , 2016 increased 22.4 percent to $ 45.2 million , from $ 36.9 million for the comparable period in 2015. the increases were driven primarily by increased compensation expense due to additional hiring , performance bonus expense , and commissions related to increased sales . story_separator_special_tag because product manufactured prior to regulatory approval may not be sold unless regulatory approval is obtained , we treat manufacturing costs for product candidates as research and development expenses at the time such costs are incurred . we capitalize into inventory manufacturing any costs related to an approved product that are incurred after regulatory approval . we value inventory at the lower of cost or net realizable value . we determine the cost of inventory using the specific identification method , which approximates a first-in , first-out basis . we write down inventory that has become obsolete or has a cost basis in excess of its expected net realizable value . any expired inventory is disposed of and the related costs are recognized as cost of sales in the statement of comprehensive income ( loss ) in that period . 36 cost of sales includes the cost of product ( i.e . , the cost of manufacturing korlym , including material , third-party manufacturing costs and indirect personnel and other overhead costs ) based on units for which revenue is recognized in the current period , as we ll as costs of stability testing , logistics and distribution . inventory amounts that are not expected to be consumed within 12 months following the balance sheet date are classified as strategic inventory , a noncurrent asset . accruals of research and development costs research and development expenses consist of direct expenses , such as the cost of discovery research , pre-clinical studies , and clinical trials relating to our portfolio of proprietary , selective cortisol modulators , manufacturing development , preparations for submissions to the fda or other regulatory agencies and related overhead expenses . we expense nonrefundable payments and the cost of technologies and materials used in research and development as they are incurred . we base our cost accruals for research , preclinical activities , and clinical trials on estimates of work completed under service agreements , milestones achieved , patient enrollment and past experience with similar contracts . our estimates of work completed and associated cost accruals include our assessments of information from third-party vendors and the overall status of clinical trial and other development and administrative activities . stock-based compensation we account for stock-based compensation related to option grants under the fair value method , based on the value of the award at the grant date , using the black-scholes option valuation model . we recognize this expense over the requisite vesting period , net of estimated forfeitures . if actual forfeitures differ from our estimates , we adjust stock-based compensation expense accordingly . we recognize the expense of options granted to non-employees based on the fair value-based measurement of the option grants at the time of vesting . debt obligation the accounting for the financing agreement with biopharma required us to make certain estimates and assumptions , including the timing of royalty payments due to biopharma , the expected rate of return to biopharma , the split between current and long-term portions of the obligation , and the accretion of interest expense . actual payment amounts were based on korlym receipts during the applicable quarter . we made our final payment under the financing agreement in july 2017. income taxes we account for income taxes in accordance with asc 740 , income taxes ( “ asc 740 ” ) , which requires recognition of deferred tax assets and liabilities for the expected tax consequences of our future financial and operating activities . under asc 740 , we determine deferred tax assets and liabilities based on the temporary difference between the financial statement and tax bases of assets and liabilities using the tax rates in effect for the year in which we expect such differences to reverse . if we determine that it is more likely than not that we will not generate sufficient taxable income to realize the value of some or all of our deferred tax assets ( net of our deferred tax liabilities ) , we establish a valuation allowance offsetting the amount we do not expect to realize . we perform this analysis each reporting period and reduce our measurement of deferred taxes , if the likelihood we will realize them becomes uncertain . in deciding whether a valuation allowance is necessary , gaap requires us to give significant weight to objective evidence . it is difficult to conclude that sufficient taxable income will be generated when there is significant evidence – such as corcept 's substantial cumulative losses – that future taxable income is not assured . because forecasts of taxable income are inherently uncertain and not objectively verifiable , our cumulative losses must weigh heavily in our analysis . 37 we are also required to evaluate and quantify other sources of taxable income , such as the possible reversal of future deferred tax liabilities , should any arise , and the implementation of tax planning strategies . evaluating and quantifying these amounts is difficult and involves significant judgment , based on all of the available evidence and assumptions about our future activities . until the fourth quarter of 2017 , we maintained a valuation allowance on the entire value of our deferred taxes and did not report these amounts in our balance sheet . we also account for uncertain tax positions in accordance with asc 740 , which requires us to adjust our financial statements to reflect only those tax positions that are more-likely-than-not to be sustained upon review by federal or state examiners . we may recognize a tax benefit only if it is more likely than not the tax position will be sustained on examination by the taxing authorities , based on the technical merits of the position . the tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50 % likelihood of being realized upon settlement . our policy is to report interest and
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources until 2015 , we incurred operating losses every year . at december 31 , 2017 , we had an accumulated deficit of $ 193.1 million . since 2012 , we have relied on revenues from the sale of korlym and proceeds from the sale of common stock and the now concluded financing agreement with biopharma to fund our operations . based on our current plans , which include fully funding our cushing 's syndrome commercial operations , conducting phase 2 and phase 3 trials of relacorilant in both cushing 's syndrome and solid tumors , the development of cort125281 to treat patients with crpc and cort118335 to treat patients with antipsychotic-induced weight gain and nash , we expect to fund our operations without needing to raise additional funds , although we may choose to raise additional funds to finance our strategic priorities . if we were to raise funds , equity financing could be dilutive to stockholders . debt financing , if available , could involve restrictive covenants . funds raised through collaborations with other companies may require us to relinquish certain rights in our product candidates . at december 31 , 2017 , we had cash , cash equivalents and marketable securities of $ 104.0 million , consisting of cash and cash equivalents of $ 31.1 million and marketable securities of $ 72.9 million , compared to cash and cash equivalents of $ 51.5 million at december 31 , 2016. net cash provided by operating activities for the years ended december 31 , 2017 , 2016 and 2015 was $ 60.9 million , $ 18.4 million and $ 3.1 million , respectively . these increases were primarily due to greater sales volumes .
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in quarters prior to 2012 , all ngl sales revenues were included with natural gas sales revenues . results of operations fiscal year 20 1 3 compared to fiscal year 20 1 2 overview the company recorded net income of $ 13,960,049 , or $ 1.67 per share , in 2013 , compared to net income of $ 7,370,996 , or $ 0.88 per share , in 2012 . revenues increased in 2013 primarily due to higher oil and natural gas sales volumes and prices , partially offset by decreased lease bonuses received . expenses increased due to higher dd & a , loe and g & a in 2013 , partially offset by decreases in the provision for impairment and exploration costs and increases in other miscellaneous income . significant well additions , through drilling , in 2013 increased production volumes , resulting in higher dd & a and loe in 2013. oil , ngl and n atural g as sales oil , ngl and natural gas sales increased $ 19,787,444 or 48 % for 2013 , as compared to 2012. the increase was due to increased oil volumes of 53 % , increased natural gas volumes of 20 % , increased natural gas prices of 2 6 % and a 2 % increase in oil prices in 2013. the oil and ngl production increase is primarily the result of horizontal drilling in the marmaton/cleveland , hogshooter and granite wash in w estern oklahoma , horizontal cleveland drilling in the texas panhandle and horizontal woodford shale drilling in the anadarko and ardmore basins in ( 28 ) southern oklahoma . to a lesser extent , focused drilling in the permian basin in west texas , the bakken in north dakota and the mississippian in n orthern oklahoma contributed to the oil and ngl production increase . the natural gas production increase was primarily driven by horizontal development drilling in the arkansas fayetteville shale and natural gas production associated with the aforementioned oil and ngl drilling activity . production by quarter for 2013 and 2012 was as follows ( mcfe ) : replace_table_token_13_th lease bonus and rentals lease bonuses and rentals de creased $ 6,214,145 in 2013. the decrease was mainly due to the company leasing partial rights on 2,743 net mineral acres in roger mills county , oklahoma , for $ 4.8 million and leasing 2,431 net acres in the horizontal mississippian play in northern oklahoma for $ 1.7 million in 2012. there were no large leases of the company 's mineral acreage in 2013. gains ( losses ) on derivative contracts realized and unrealized gains and losses are scheduled below : replace_table_token_14_th the increase in gains was mainly due to the natural gas collars and natural gas fixed price swaps being more beneficial in 2013 , as nymex gas futures have fallen below the floor of the collars and the fixed gas prices of the swaps . as of september 30 , 201 3 , the company 's natural gas fixed price swaps have expiration dates of october , november and december 2013 ; the natural gas costless collar contracts have expiration dates of december 2013 and april 2014 ; the oil costless collar contracts have expiration dates of december 2013 and june 2014 and the oil fixed price swaps have an expiration date of december 2013. lease operating expenses ( loe ) loe increased $ 2,719,433 or 30 % in 2013. loe costs per mcfe of production increased from $ .86 in 2012 to $ .92 in 2013. the total loe increase is primarily related to increased field operating costs of $ 726,095 in 2013 compared to 2012. field operating costs increased mainly due to the large addition in the number of wells drilled in 2013. field operating costs were $ .40 per mcfe in 2013 compared to $ .42 per mcfe in 2012 , a 5 % decrease . this decrease in rate is principally the result of fewer well workovers performed in 2013 . ( 29 ) the increase in loe related to field operating costs was also coupled with an increase in handling fees ( primarily gathering , transportation and marketing costs ) on natural gas of $ 1,993,338 in 2013 , as compared to 2012. on a per mcfe basis , these fees were up $ .07 due to higher natural gas prices . handling fees are mainly charged as a percent of natural gas sales , but can also be charged based on natural gas production volumes . exploration costs exploration costs were $ 9,795 in 2013 , compared to $ 979,718 in 2012 , a $ 969,923 decrease . during 2013 , leasehold impairment and expired leasehold totaled $ 70,638 , compared to $ 377,942 during 2012 , a $ 307,304 decrease . the decline was driven by lower provisions for expected lease expirations in 2013 , as compared to 2012. charges on three exploratory dry holes totaled $ 601,776 during 2012 ; whereas , in 2013 the company had no exploratory dry holes and received a net credit adjustment of $ 60,843 for exploratory dry hole costs incurred in previous years . depreciation , depletion and amortization ( dd & a ) dd & a increased $ 2,884,529 or 15 % in 2013. dd & a per mcfe was $ 1.69 in 2013 , compared to $ 1.80 in 2012. dd & a increased $ 4,284,278 due to oil , ngl and natural gas production volumes increasing 2 2 % in the 2013 period , compared to the 2012 period . an offsetting decrease of $ 1,3 9 9,749 was caused by a n $ .11 decrease in the dd & a rate . this rate decrease is principal ly due to positive performance and price revisions increasing ultimate reserves at september 30 , 2013 , for a significant number of wells . story_separator_special_tag as of september 30 , 20 12 , the company 's natural gas basis protection swaps ha d an expiration date of december 2012 ; the natural gas costless collar contracts ha d expiration dates of october 2012 and january 2013 ; the oil costless collar contracts ha d an expiration date of december 2012. lease operating expenses ( loe ) loe increased $ 700,216 or 8 % in 2012. loe costs per mcfe of production decreased from $ .95 in 2011 to $ .86 i n 2012. the total loe increase wa s primarily related to increased field operating costs of $ 487,388 in 2012 compared to 2011. field operating costs increased mainly due to the large addition of wells through acquisition and drilling in 2012. field operating costs were $ .42 per mcfe in 2012 compared to $ .44 per mcfe in 2011 , a 5 % decrease . this decrease in rate wa s principally the result of fewer well workovers performed in 2012. the increase in loe related to field operating costs was also coupled with an increase in handling fees ( primarily gathering , transportation and marketing costs ) on natural gas of $ 212,828 in 2012 , as compared to 2011. on a per mcfe basis , these fees were down $ .06 due to lower natural gas prices and the addition of significant oil production , which is unencumbered by these fees . handling fees are mainly charged as a percent of natural gas sales but can also be charged based on natural gas production volumes . exploration costs exploration costs were $ 979,718 in 2012 compared to $ 1,025,542 in 2011 , a $ 45,824 decrease . during 2012 , leasehold impairment and expired leasehold totaled $ 377,942 compared to $ 482,491 during 2011 , a $ 104,549 decrease . the decline was driven by lower provisions for expected lease expirations in 2012 , as compared to 2011. charges on three exploratory dry holes totaled $ 601,776 during 2012 ; whereas , in 2011 the company incurred exploratory dry hole costs on two wells totaling $ 543,0 5 1. depreciation , depletion and amortization ( dd & a ) ( 32 ) dd & a increased $ 4,349,051 or 30 % in 2012. dd & a per mcfe was $ 1.8 0 in 2012 compared to $ 1.65 in 2011. dd & a increased $ 2,738,695 due to oil , ngl and natural gas production volumes increasing 19 % in the 2012 period compared to the 2011 period . the remaining increase of $ 1,610,356 was caused by a $ .1 5 increase in the dd & a rate . this rate increase is mainly due to negative price revisions reducing ultimate reserves on a significant number of wells in reserves reported at september 30 , 2012 , as well as higher finding cost experienced in oil and liquids - rich areas where the company is drilling and has had new wells come on line . provision for impairment the provision for impairment decreased $ 901,654 in 2012 , as compared to 2011. during 2012 , impairment of $ 826,508 was recorded on twelve small fields in oklahoma . these fields have one to a few wells and are more susceptible to impairment when a well in the field experiences downward reserve revisions , or when a newly completed well with low reserves is added to one of these fields . during the 2011 period , impairment of $ 1,728,162 was recorded on nine small fields in oklahoma and texas . general and administrative costs ( g & a ) g & a increased $ 394,19 3 or 7 % in 2012. the increase is primarily related to increases in the following expense categories : personnel $ 419,166 and legal fees $ 118,245. these were partially offset by decreases in technical consulting , board fees , company insurance and other expenses of $ 143,218 in 2012. the increase in 2012 personnel related expenses was the result of additional employee s and annual increases in salaries and bonuses totaling $ 206,806 , restricted stock expense increase of $ 178,441 and higher esop expense of $ 25,475. the increase in legal expenses resulted from increased acquisition activity and a quiet title defense settlement in 2012. provision ( benefit ) for income taxes the 2012 provision for income taxes of $ 3,274,000 was based on a pre-tax income of $ 10,644,996 , as compared to a provision for income taxes of $ 3,192,000 in 2011 , based on a pre-tax income of $ 11 , 685 ,912. the effective tax rate for 2012 was 31 % , compared to an effective tax rate for 2011 of 27 % . the 2012 effective tax rate increase of 4 % was due to increased state income taxes of $ 553,926 , partially offset by an excess percentage depletion benefit increase of $ 112,524. the 2012 state income tax increase was a result of significantly higher lease bonus income in oklahoma , combined with lower intangible drilling cost deductions from oklahoma taxable income . the company 's utilization of excess percentage depletion ( which is a permanent tax benefit ) decreases the provision for income taxes . the benefit of excess percentage depletion is not directly related to the amount of recorded income or loss . accordingly , in cases where the recorded income or loss is relatively small , the proportional effect of the excess percentage depletion on the effective tax rate may become significant . story_separator_special_tag style= `` margin:0pt ; line-height : normal ; text-align : left ; font-family : times new roman ; font-size : 12pt `` > based on expected capital expenditure levels and anticipated cash provided by operating activities for 2014 , the company has sufficient liquidity to fund its ongoing operations and , combined with availability under its credit facility , to fund acquisitions . contractual obligations and commitments t he company
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources at september 30 , 2013 , the company had positive working capital of $ 7,504,588 , as compared to positive working capital of $ 3,995,103 at september 30 , 2012 . liquidity cash and cash equivalents were $ 2,867,171 as of september 30 , 2013 , compared to $ 1,984,099 at september 30 , 2012 , an increase of $ 883,072 . cash flows for the 12 months ended september 30 are summarized as follows : ( 33 ) replace_table_token_17_th operating activities : net cash provided by operating activities increased $ 12,030,913 during 2013 , as compared to 2012 , the result of the following : receipts of oil , ngl and natural gas sales ( net of production taxes and gathering , transportation and marketing costs ) increased $ 11,844,2 8 1 . i ncreased receipts from partnership distributions o f $ 316,418 combined with lower income tax payments of $ 505,466 . decreased n et realized gains on derivative contracts of $ 448,478 . increased c ash expenditures for f ield related loe of $ 435,800. investing activities : net cas h used in investing activities decreased $ 11,924,285 during 2013 , as compared to 2012 , due to : a decrease in cash used to acquire properties of $ 19,360,371 ( $ 18.8 million was used in the first quarter of 2012 to acquire producing properties , leasehold and mineral acreage in arkansas ) . lower lease bonus payments received during 2013 of $ 1,023,368 , compared to $ 7,265,808 during 2012 , which decreased cash provided by investing activities by $ 6,242,440 . higher drilling and completion activity during 2013 increased capital expenditures by $ 1,618,479. financing activities : 2013 n et cash used in financing activities was $ 10,154,362 , as compared to net cash provided by financing activities in 2012 of $ 11,394,864 , result ing in a net increase of $ 21,549,226 of cash used in financing activities .
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macroeconomic factors that may affect customer spending patterns , and thereby our results of operations , include , but are not limited to : health of the economy ; consumer confidence in the economy ; financial market volatility ; wages , jobs and unemployment trends ; the housing market , including real estate prices and mortgage rates ; consumer credit availability ; consumer debt levels ; gasoline and fuel prices ; interest rates and inflation ; tax rates and tax policy ; immigration policy ; import and customs duties/tariffs and policy ; impact of natural or man-made disasters ; legislation and regulations ; international unrest , trade disputes , labor shortages , and other disruptions to the supply chain ; changes to raw material and commodity prices ; national and international security and safety concerns ; and impact any of public health pandemics . factors that impact consumer discretionary spending , which remains volatile globally , continue to create a complex and challenging retail environment for us . see the section of this annual report entitled `` impact of covid-19 on our business . `` consumer preferences and demands . the level of success we achieve is dependent on , among other factors , how accurately and timely we predict consumer tastes and preferences regarding sporting goods and outdoor recreation merchandise , the level of consumer demand , the availability of merchandise , and the competitive environment . our products must appeal to a broad range of customers whose preferences can not be predicted with certainty and are subject to change . we must identify , obtain supplies of , and offer to our customers , attractive and high-quality merchandise on a continuous basis . it is difficult to predict consistently and successfully the products and services our customers will demand as we often purchase products from our vendors several months in advance of the proposed delivery . if we misjudge the market for our products , we may be faced with inventory excesses or shortages for some products . we utilize a variety of measures to help us identify products that are relevant to our customer base and to better understand changing customer trends , such as social media analysis , internet search analytics , internal customer insights and vendor intelligence . 52 strategic inventory management . we must maintain sufficient inventory levels of merchandise that our customers desire to successfully operate our business . a shortage of popular merchandise could reduce our net sales . conversely , we also must seek to avoid accumulating excess inventory to maintain appropriate in-stock levels . if we overstock unpopular merchandise , then we may be forced to take significant inventory markdowns or miss opportunities for the sale of other merchandise , both of which could have a negative impact on our profitability , and , in turn , our sales may decline or we may be required to sell the merchandise we have obtained at lower prices . we have deployed several new tools over recent years to improve inventory handling and vendor management , including third-party programs to analyze our inventory stock and execute a disciplined markdown strategy throughout the year at every location . this implementation , along with other factors , has allowed us to improve our inventory management in stores , increasing our average inventory turns from 2.84x in 2019 to 3.89x in 2020. we have coupled these tools with the data we have been able to collect from our academy credit card program and targeted customer surveys , so that we can better estimate future inventory requirements . it is imperative that we continue to find innovative ways to strengthen our inventory management if we are to remain competitive and expand our margins on a go-forward basis . during 2020 , although we received significant levels of inventory to support our sales , on a net basis , we experienced significant inventory reductions from high sell-through during the period . despite increased inventory receipts , we experienced challenges in maintaining certain merchandise , resulting from the covid-19 pandemic , manufacturing supply limitations , and transportation capacity issues , the latter of which resulted in higher than normal transportation costs . we expect to use cash to replenish such inventory during 2021 , which we expect will impact our net cash provided by operating activities for the coming year . value strategy . we offer a broad assortment of products at competitive prices that offer extraordinary value . our in-store experience includes value-added customer service delivered by our highly trained and passionate staff , such as free assembly of certain products ( such as bicycles , grills , and bows ) , fitness equipment demonstrations , issuances and renewals of hunting and fishing licenses , fishing line spooling and assisting customers with carrying bulk items to the car , among others . our goal is to consistently offer better value than our peer retailers . our value-based pricing gives us an advantage over the specialty retailers and other large format retailers , who typically offer their more limited assortment at premium prices . our broad assortment gives us an advantage over mass general merchants who typically do not carry the leading national brands sold at academy . we have also continued to add owned brand products to our assortment of products , which we generally price lower than the national brand products of comparable quality that we also offer . a shift in our sales mix in which we sell more units of our owned brand products and fewer units of the national brand products would generally have a positive impact on our gross margin but an adverse impact on our total net sales . e-commerce . we expect that the expansion and enhancement of our omnichannel capabilities will be a key driver of growth in our net sales and gross margin . story_separator_special_tag management uses adjusted ebitda , adjusted net income , pro forma adjusted net income , pro forma adjusted earnings per share and adjusted free cash flow , which are non-gaap financial measures to supplement gaap measures of performance in the evaluation of the effectiveness of our business strategies , to make budgeting decisions , and to compare our performance against that of other peer companies using similar measures . see `` non-gaap financial measures `` below . e-commerce penetration . e-commerce penetration is defined as total e-commerce merchandise sales ( which includes bopis ) divided by total company merchandise sales . components of our results of operations our profitability is primarily influenced by fluctuations in net sales , gross margin and our ability to leverage selling , general and administrative expenses . net sales . net sales are derived from in-store and e-commerce merchandise sales , net of sales tax and an allowance for merchandise returns . net sales fluctuations can be driven by new store openings , comparable sales increases or decreases including e-commerce sales , our ability to adjust inventory based on sales fluctuations , our management of vendor relations and meeting customer demand , allowances and logistics , seasonality , unseasonal or extreme weather , changes in consumer shopping preferences , consumer discretionary spending , and market and sales promotions . gross margin . gross margin is our net sales less cost of goods sold . our cost of goods sold includes the direct cost of merchandise and costs related to procurement , warehousing and distribution . these costs consist primarily of payroll and benefits , occupancy costs and freight and are generally variable in nature relative to our sales volume . our gross margin depends on a number of factors , such as net sales increases or decreases , our promotional activities , product mix including owned brand merchandise sales , and our ability to control cost of goods sold , such as inventory and logistics cost management . our gross margin is also impacted by variables including commodity costs , freight costs , shrinkage and inventory processing costs and e-commerce shipping costs . we track and measure gross margin as a percentage of net sales in order to evaluate our performance against profitability targets . 56 selling , general and administrative expenses . selling , general and administrative ( `` sg & a `` ) expenses include store and corporate administrative payroll and payroll benefits , store and corporate headquarters occupancy costs , advertising , credit card processing , information technology , pre-opening costs and other store and administrative expenses . these expenses are both variable and fixed in nature . we track and measure operating expenses as a percentage of net sales in order to evaluate our performance against profitability targets . management of sg & a expenses depends on our ability to balance a control of operating costs , such as store , distribution center , and corporate headcount , information technology infrastructure and marketing and advertising expenses , with efficiently and effectively servicing our customers . we expect that our sg & a expenses will increase in future periods due to our continuing growth and in part to additional legal , accounting , insurance and other expenses we expect to incur as a result of being a public company . income tax expense ( benefit ) . prior to october 1 , 2020 , new academy holding company , llc , our prior ultimate parent company , was treated as a flow through entity for u.s. federal income tax purposes and thus no federal income tax expense was recorded in our consolidated statements of income for periods prior to october 1 , 2020. our tax rate prior to october 1 , 2020 was almost entirely the result of state income taxes . in connection with our initial public offering ( `` ipo `` ) , as a result of the reorganization transactions ( see note 1 to the consolidated financial statements ) completed on october 1 , 2020 , academy sports and outdoors , inc. ( `` aso , inc. `` ) is treated as a u.s. corporation for u.s. federal , state , and local income tax purposes and accordingly , a provision for income taxes has been recorded for the anticipated tax consequences of our reported results of operations for federal , state and local income taxes since october 1 , 2020. results of operations 2020 ( 52 weeks ) compared to 2019 ( 52 weeks ) the following table sets forth amounts and information derived from our consolidated statements of income for the periods indicated as follows ( dollar amounts in thousands ) : replace_table_token_5_th * percentages in table may not sum properly due to rounding . * * nm - not meaningful net sales . net sales increased $ 859.3 million , or 17.8 % , in 2020 over the prior year . the 17.8 % increase was driven primarily by 16.1 % of favorable comparable sales , as well as additional net sales generated by new locations . as of fiscal year end 2020 , we had the full benefit of eight stores which were opened during 2019 , partially offset by a reduction of sales due to the closure of two locations during 2019. these stores generated additional net sales of $ 77.7 million , or 1.4 % of net sales . the 16.1 % increase in comparable sales resulted from favorable sales performances across all of our merchandise divisions . the outdoors division increase was primarily driven by strong sales in firearms , ammunition and fishing products . the sports and recreation division sales increased as a result of various products such as fitness equipment and accessories , bikes and barbecues and grills , which were partially offset by declines in team sports . the apparel division increased due to increases in athletic , outdoor and seasonal , and youth apparel divisions , partially offset
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | sources and uses of liquidity historically , our principal sources of cash have included : cash generated from operating activities ; issuances of debt securities ; and borrowings under our term loan and abl credit facilities . our historical uses of cash have been associated primarily with : cash used for operating activities such as the purchase and growth of inventory , expansion of our sales and marketing activities and other working capital needs ; cash used for capital improvements and support of expansion plans , as well as various investments in store renovations , store fixtures and on-going infrastructure improvements ; cash used to pay our debt obligations and related interest expense ; cash used to pay partnership distributions to our members ; and fluctuations in working capital due to timing differences of cash receipts and cash disbursements . on january 30 , 2021 , our cash and cash equivalents totaled $ 377.6 million . we are focused on navigating the recent challenges presented by covid-19 through the preservation of our long-term liquidity and management of cash flow through preemptive actions to enhance our ability to meet our short-term liquidity needs . during 2020 , we took various cost cutting measures to maximize operational cash flows ( see `` impact of covid-19 on our business '' in the section of this annual report entitled management 's discussion & analysis ) .
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furthermore , our customers do not typically enter into long-term forward maintenance contracts with us . in any given year , certain of our smaller greenfield projects may generate less than $ 1 million in annual sales , and certain of our larger plant expansions or upgrades may generate in excess of $ 1 million in annual sales , though we believe that such exceptions are few in number and insignificant to our overall results of operations . ths has been excluded from the greenfield and mro/ue calculations . most of ths 's revenue would be classified as mro/ue under these definitions . we believe that our pipeline of planned projects , in addition to our backlog of signed purchase orders , provides us with visibility into our future revenue . historically we have experienced few order cancellations , and the cancellations that have occurred in the past have not been material compared to our total contract volume or total backlog . the small number of order cancellations is attributable in part to the fact that a large portion of our solutions are ordered and installed toward the end of greenfield project construction . our backlog at march 31 , 2019 was $ 120.0 million , inclusive of $ 26.3 million for ths , as compared to $ 159.6 million at march 31 , 2018 . the timing of recognition of revenue out of backlog is not always certain , as it is subject to a variety of factors that may cause delays , many of which are beyond our control ( such as customers ' delivery schedules and levels of capital and maintenance expenditures ) . when delays occur , the recognition of revenue associated with the delayed project is likewise deferred . cost of sales . our cost of sales includes primarily the cost of raw material items used in the manufacture of our products , cost of ancillary products that are sourced from external suppliers and construction labor cost . additional costs of revenue include contract engineering cost directly associated to projects , direct labor cost , shipping and handling costs , and other costs associated with our manufacturing/fabrication operations . the other costs associated with our manufacturing/fabrication operations are primarily indirect production costs , including depreciation , indirect labor costs , and the costs of manufacturing support functions such as logistics and quality assurance . key raw material costs include polymers , copper , stainless steel , insulating material , and other miscellaneous parts related to products manufactured or assembled as part of our heat tracing solutions . historically , our primary raw materials have been readily available from multiple suppliers and raw material costs have been stable , and we have been generally successful with passing along raw material cost increases to our customers . therefore , increases in the cost of key raw materials of our products have not generally affected our gross margins . we can not provide any assurance that we may be able to pass along such cost increases , including the potential impacts of tariffs , to our customers in the future , and if we are unable to do so , our results of operations may be adversely affected . operating expenses . our marketing , general and administrative and engineering expenses are primarily comprised of compensation and related costs for sales , marketing , pre-sales engineering and administrative personnel , as well as other sales related expenses and other costs related to research and development , insurance , professional fees , the global integrated business information system , provisions for bad debts and warranty expense . key drivers affecting our results of operations . our results of operations and financial condition are affected by numerous factors , including those described above under item 1a , `` risk factors `` and elsewhere in this annual report and those described below : 29 timing of greenfield projects . our results of operations in recent years have been impacted by the various construction phases of large greenfield projects . on very large projects , we are typically designated as the heat tracing provider of choice by the project owner . we then engage with multiple contractors to address incorporating various heat tracing solutions throughout the overall project . our largest greenfield projects may generate revenue for several quarters . in the early stages of a greenfield project , our revenues are typically realized from the provision of engineering services . in the middle stages , or the material requirements phase , we typically experience the greatest demand for our heat tracing cable , at which point our revenues tend to accelerate . revenues tend to decrease gradually in the final stages of a project and are generally derived from installation services and demand for electrical panels and other miscellaneous electronic components used in the final installation of heat tracing cable , which we frequently outsource from third-party manufacturers . therefore , we typically provide a mix of products and services during each phase of a greenfield project , and our margins fluctuate accordingly . cyclicality of end-users ' markets . demand for our products and services depends in large part upon the level of capital and maintenance expenditures of our customers and end users , in particular those in the energy , chemical processing and power generation industries , and firms that design and construct facilities for these industries . these customers ' expenditures historically have been cyclical in nature and vulnerable to economic downturns . greenfield projects , and in particular large greenfield projects ( i.e . , new facility construction projects generating in excess of $ 5 million in annual sales ) , historically have been a substantial source of revenue growth , and greenfield revenues tend to be more cyclical than mro/ue revenues . story_separator_special_tag on march 31 , 2019 , we had in place standby letters of credit , bank guarantees and performance bonds totaling $ 19.8 million to back our various customer contracts . our indian subsidiary also has $ 5.2 million in customs bonds outstanding . liquidity and capital resources our primary sources of liquidity are cash flows from operations and funds available under our revolving credit facility and other revolving lines of credit . our primary liquidity needs are to finance our working capital , capital expenditures debt service needs and potential future acquisitions . in october 2017 , we entered into a new credit agreement that provides for ( i ) a seven-year $ 250.0 million variable rate senior secured term loan b facility and ( ii ) a five-year $ 60.0 million senior secured revolving credit facility . at march 31 , 2019 , outstanding principal under the term loan b facility was $ 206.5 million . cash and cash equivalents . at march 31 , 2019 , we had $ 31.4 million in cash and cash equivalents . we maintain cash and cash equivalents at various financial institutions located in many countries throughout the world . approximately $ 5.4 million , or 17 % , of these amounts were held in domestic accounts with various institutions and approximately $ 26.0 million , or 83 % , of these amounts were held in accounts outside of the united states with various financial institutions . investments . at march 31 , 2018 , we had 1.0 million in investments . the investments have maturities that range from 90 days to one year . the investments are primarily in held in foreign accounts with various financial institutions . senior secured credit facility . see note 11 , “ long-term debt—senior secured credit facility ” to our consolidated financial statements and accompanying notes thereto included in item 8 below of this annual report for additional information on our senior secured term loan and revolving credit facilities , which is hereby incorporated by reference into this item 2. at march 31 , 2019 , we had outstanding borrowings of $ 11.2 million under our revolving credit facility and $ 44.5 million of available capacity thereunder , after taking into account the borrowing base and letters of credit outstanding , which totaled $ 4.3 million . from time to time , we may choose to utilize our revolving credit facility to fund operations , acquisitions or other investments despite having cash available within our consolidated group in light of the cost , timing and other business considerations . 34 as of march 31 , 2019 , we had $ 206.5 million of outstanding principal on our term loan b facility . commencing april 1 , 2018 , we will be required to make quarterly principal payments of the term loan of $ 0.6 million through july 31 , 2024. thereafter , the remaining principal balance will be settled with a lump-sum payment of $ 192.8 million due at maturity of the term loan in october 2024. during fiscal years 2019 and 2018 , we made an optional debt prepayment of principal on the term loan b of $ 16.0 million and $ 25.0 million , respectively . from time to time , we may choose to make unscheduled and additional repayments of principal on the term loan b based on available cash flows . guarantees ; security . the term loan is guaranteed by the company and all of the company 's current and future wholly owned domestic material subsidiaries ( the “ us subsidiary guarantors ” ) , subject to certain exceptions . obligations of the company under the revolving credit facility are guaranteed by the company and the us subsidiary guarantors . the obligations of thermon canada inc. ( the “ canadian borrower ” ) under the revolving credit facility are guaranteed by the company , thermon holding corp. ( the “ us borrower ” ) , the us subsidiary guarantors and each of the wholly owned canadian material subsidiaries of the canadian borrower , subject to certain exceptions . the term loan and the obligations of the us borrower under the revolving credit facility are secured by a first lien on all of the company 's assets and the assets of the us subsidiary guarantors , including 100 % of the capital stock of the us subsidiary guarantors and 65 % of the capital stock of the first tier material foreign subsidiaries of the company , the us borrower and the us subsidiary guarantors , subject to certain exceptions . the obligations of the canadian borrower under the revolving credit facility are secured by a first lien on all of the company 's assets , the us subsidiary guarantors ' assets , the canadian borrower 's assets and the assets of the material canadian subsidiaries of the canadian borrower , including 100 % of the capital stock of the canadian borrower 's material canadian subsidiaries . financial covenants . the term loan is not subject to any financial covenants . the revolving credit facility requires the company , on a consolidated basis , to maintain certain financial covenant ratios . the company must maintain a consolidated leverage ratio on the last day of the following periods : 5.5:1.0 for december 31 , 2017 through september 30 , 2018 ; 5.0:1.0 for december 31 , 2018 through september 30 , 2019 ; 4.5:1.0 for december 31 , 2019 through september 30 , 2020 ; and 3.8:1.0 for december 31 , 2020 and each fiscal quarter thereafter . in addition , on the last day of any period of four fiscal quarters , the company must maintain a consolidated fixed charge coverage ratio of not less than 1.3:1.0. as of march 31 , 2019 , we were in compliance with all financial covenants of the credit facility . restrictive covenants . the credit agreement governing our credit facility contains various restrictive covenants that
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | net cash provided by operating activities totaled $ 23.2 million for fiscal 2019 compared to $ 22.9 million for fiscal 2018 , an increase of $ 0.3 million . our net income increased from $ 13.2 million in fiscal 2018 to $ 23.2 million in fiscal 2019 , an increase of $ 10.0 million . non-cash reconciling items such as depreciation and amortization , stock compensation expense , changes in deferred taxes and other non-cash charges were $ 32.5 million and $ 20.3 million in fiscal 2019 and fiscal 2018 , respectively . additionally , in fiscal 2019 total working capital accounts represented a use of cash of $ 32.4 million compared to a use of cash of $ 10.6 million in fiscal 2018. in fiscal 2019 our working capital assets increased representing a use of cash of $ 30.3 million , and in fiscal 2018 our working capital assets also increased representing a use of cash of $ 30.6 million . the comparative increase in the fiscal 2019 use of cash of $ 0.3 million is primarily the result of an increase , or use of cash , in accounts receivable and contract assets of $ 0.7 million , and $ 5.9 million , respectively , offset by a decrease in the use of cash for inventory and other current and non-current assets of $ 5.6 million and $ 1.3 million , respectively . the increase in accounts receivable is primarily attributable to the increase in revenue in fiscal 2019 , and the increase in contract assets is primarily due to the increase of project revenues .
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the equity features contained in our investment portfolio are structured to realize capital appreciation over the long-term and typically do not generate current income in the form of dividends or interest . we have historically made initial investments of $ 500,000 to $ 1,000,000 directly in companies through equity or in debt or loan instruments and frequently provided follow-on investments during our investment tenure . the debt instruments generally have a maturity of not more than five years and usually have detachable equity warrants . interest may be paid currently or deferred , based on the investment structure negotiated . we may exit investments through the maturation of a debt security or when a liquidity event takes place , such as the sale , recapitalization , or initial public offering of a portfolio company . the method and timing of the disposition of our portfolio investments can be critical to the realization of maximum total return . we generally expect to dispose of our equity securities through private sales of securities to other investors or through an outright sale of the portfolio company or a merger . we anticipate our debt investments will be repaid with interest and hope to realize further appreciation from the warrants or other equity type instruments we receive in connection with the investment . we fund new investments and operating expenses through existing cash balances , investment returns , and interest and principal payments from our portfolio companies 12 2017 portfolio and investment activity we believe the change in net asset value over time is the leading valuation metric of our performance . exits from our portfolio holdings are the key driver of growth in net asset value over time . net asset value of our portfolio decreased to $ 5.05 per share , or $ 31.9 million , at december 31 , 2017 , down ( $ 0.11 ) per share , or ( 2.1 % ) , compared with net asset value of $ 5.16 per share , or $ 32.6 million , at the end of the prior year . at year end , the estimated value of our portfolio , which included securities from 30 active companies , was $ 32.3 million . this value included $ 4.4 million in net pre-tax unrealized depreciation . approximately 58 % of the portfolio was equity investments with the remainder being debt and loan investments . the portfolio generated approximately $ 1.5 million in interest , fee , dividend and other income . during 2017 , we made $ 5.4 million of new investments in 8 companies , of which one was a new portfolio company . outlook at the end of 2017 , we had $ 6.3 million in cash available for future investments and expenses , a decrease from $ 12.3 million at the end of 2016. the decrease was primarily due to $ 5.4 million of investments originated during 2017 as well as funding of ongoing operating expenses . we continue to work with the sba in determining an optimal structure within its regulatory parameters which , once completed , may result in new sba leverage commitments in 2018. we believe the combination of cash on hand , proceeds from portfolio exits , potential additional sba leverage , and prospective investment income provide sufficient capital for us to continue to add new investments to our portfolio while reinvesting in existing portfolio companies that demonstrate continued growth potential . the following short and long-term trends provide us confidence in our ability to grow rand : we expect that well run businesses will require capital to grow and should be able to compete effectively given the strong macroeconomic environment and eager reception of new technologies and service concepts . we continue to manage risk by investing with other investors , when possible . we are actively involved with the governance and management of our portfolio companies , which enables us to support their operating and marketing efforts and facilitate their growth . as our portfolio expands , we are able to better leverage our infrastructure . we have sufficient cash to invest in new opportunities and to repurchase shares . at year end , we had authorization to repurchase an additional 458,954 shares of our common stock . however , our prioritized use of cash continues to be growing our portfolio . critical accounting policies we prepare our consolidated financial statements in accordance with united states generally accepted accounting principles , or gaap , which require the use of estimates and assumptions that affect the reported amounts of assets and liabilities . for a summary of all significant accounting policies , including critical accounting policies , see note 1 to the consolidated financial statements in item 8 of this annual report . the increasing complexity of the business environment and applicable authoritative accounting guidance require us to closely monitor our accounting policies and procedures . we have two critical accounting policies that require the use of significant judgment . the following summary of critical accounting policies is intended to enhance a reader 's ability to assess our financial condition and results of operations and the potential volatility due to changes in estimates . 13 valuation of investments investments are valued at fair value as determined in good faith by management and approved by our board of directors . we invest in loan , debt , and equity instruments and there is no single standard for determining fair value of these investments . as a result , determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistent valuation process . we analyze and value each investment quarterly , and record unrealized depreciation for an investment that we believe has become impaired , including where collection of a loan or realization of the recorded value of an equity security is doubtful . story_separator_special_tag the financing fee income based on the existing portfolio is expected to be approximately $ 20,000 in 2017 , $ 15,000 in 2018 , $ 11,000 in 2019 and $ 300 in 2020. fees paid for board service at the portfolio companies were $ 4,000 and $ 11,000 for the years ended december 31 , 2016 and 2015 , respectively . expenses comparison of the years ended december 31 , 2017 and 2016 december 31 , 2017 december 31 , 2016 decrease % decrease total expenses $ 2,010,977 $ 3,401,037 ( $ 1,390,060 ) ( 41 % ) operating expenses consist predominately of compensation expense , including profit sharing , and related benefits , interest expense on outstanding sba borrowings , and general and administrative expenses including shareholder and office expenses and professional fees . the decrease in expenses during the year ended december 31 , 2017 versus the same period in 2016 was primarily caused by a decrease of $ 1,373,052 in bonus and profit sharing expense related to the gemcor ii , llc ( gemcor ) exit in early 2016. gemcor sold its assets in march 2016 and based on our ownership percentage , we received gross cash proceeds of approximately $ 13.8 million , excluding an escrow receivable , and realized a gain , before income taxes , of approximately $ 13.2 million from the sale . as a result of this sale , we recognized $ 1,385,052 under our profit sharing plan during the year ended december 31 , 2016. there were no amounts earned pursuant to the profit sharing plan for the year ended december 31 , 2017. comparison of the years ended december 31 , 2016 and 2015 december 31 , 2016 december 31 , 2015 increase % increase total expenses $ 3,401,037 $ 1,817,279 $ 1,583,758 87 % 21 the increase in operating expenses during 2016 was comprised primarily of a $ 1,262,552 increase in bonus and profit sharing expense , due to the gemcor sale in 2016 , and a $ 137,629 increase in professional fees . our largest portfolio company , in terms of fair value , gemcor ii , llc ( gemcor ) sold its assets during march 2016 and , based on our ownership percentage , we received gross cash proceeds of approximately $ 14.1 million . the realized gain from the sale , before income taxes , was $ 14,620,063 and included $ 1,100,000 that continued to be held in escrow at december 31 , 2016. the escrow holdback is recorded in other assets on the accompanying consolidated statement of financial position . the escrow was released during 2017. related to this asset sale , we accrued $ 1,270,052 under our profit sharing plan for the year ended december 31 , 2016 , that is payable to our executive officers . recording of the profit sharing expense is primarily based on net realized gains , which may be in years subsequent to when the unrealized appreciation is recognized on the underlying investments in the financial statements . this may cause a recognition of profit sharing expense in a period later than when the appreciation is recognized , as was the case in 2016. there were no amounts earned pursuant to the profit sharing plan for the year ended december 31 , 2015. professional fees were also higher during the year ended december 31 , 2016 versus 2015 because we incurred additional expenses in connection with developing and implementing our long-term growth strategy . these expenses included external legal , tax consulting and other advisory expenses to support refinement of our strategy , which involved assessing options relative to the complex regulatory environment in which we operate . net realized gains and losses on investments december 31 , 2017 december 31 , 2016 december 31 , 2015 net realized gain ( loss ) on sales and dispositions , before income tax expense ( benefit ) $ 138,240 $ 14,138,203 ( $ 42,469 ) during the year ended december 31 , 2017 , one of our portfolio companies , athenex inc. ( athenex ) completed an initial public offering and its common stock became publicly traded on the nasdaq global select market under the symbol atnx . we sold our shares in athenex and recognized a net realized gain , before income taxes , of $ 638,240 on the sale of the 46,296 athenex shares . in addition , during 2017 , we realized a loss of $ 500,000 on our investment in city dining cards ( loupe ) when the company ceased operations . during the first quarter of 2016 our portfolio company , gemcor ii , llc , sold its assets , and accordingly , we received gross cash proceeds of approximately $ 14.1 million , excluding amounts held in escrow , and recognized a realized gain , before income taxes , of $ 14,620,063. the escrow holdback at december 31 , 2016 was $ 1,100,000 and is recorded in other assets on the accompanying consolidated statement of financial position . the escrow was released during 2017. in addition , we recorded a realized gain of $ 168,140 during the year ended december 31 , 2016 from the earn out provision in connection with the 2014 sale of quadpharma , llc to athenex inc. we realized a loss of $ 650,000 on our investment in statisfy , inc. ( statisfy ) during the year ended december 31 , 2016 when the company ceased operations . during the year ended december 31 , 2015 , we recognized a net realized gain , before income taxes , of $ 262,925 on the sale of 301,582 shares of synacor , inc. ( synacor ) . synacor trades on the nasdaq global market under the symbol sync . as of december 31 , 2015 , we did not own any shares of synacor . we recognized a realized loss of $ 5,394 on an adjustment to the binoptics corporation ( binoptics )
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources our principal objective is to achieve capital appreciation . therefore , a significant portion of the investment portfolio is structured to maximize the potential for capital appreciation and may provide little or no current yield in the form of dividends or interest payments . as of december 31 , 2017 , our total liquidity consisted of $ 6,262,039 in cash . net cash used by operating activities has averaged approximately $ 2,314,000 over the last three years . the average cash used for investments in portfolio companies has averaged approximately $ 6,084,000 over the last three years . our cash flow may fluctuate based on the timing of the receipt of dividend income , realized exits and the associated income taxes paid . we will generally use cash to fund our operating expenses and to invest in companies as we build our portfolio . we anticipate that we will continue to exit investments . however , the timing of liquidation events within the portfolio is difficult to project . as of december 31 , 2017 , we did not have any outstanding commitments to borrow funds from the sba . starting in 2022 ( see footnote 5 in the notes to the consolidated financial statements ) our outstanding sba debt begins to reach maturity and this will require us to identify sources of future funding if liquidation of investments is not sufficient to fund operations and repay the sba debt obligation .
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we expect to continue to incur significant expenses and increasing operating losses for at least the next several years . we expect our expenses to increase substantially in connection with our ongoing activities , particularly as we continue the development of and potentially seek marketing approval for lefamulin and , possibly , other product candidates and continue our research activities . our expenses will increase if we suffer any delays in our phase 3 clinical program for lefamulin for cabp , including delays in enrollment of patients . if we obtain marketing approval for lefamulin or any other product candidate that we develop , we expect to incur significant commercialization expenses related to product sales , marketing , distribution and manufacturing . furthermore , we expect to incur additional costs associated with operating as a public company . based on our current plans , we do not expect to generate significant revenue unless and until we obtain marketing approval for , and commercialize , lefamulin . we do not expect to obtain marketing approval before 2019 , if at all . accordingly , we will need to obtain substantial additional funding in connection with our continuing operations . adequate additional financing may not be available to us on acceptable terms , or at all . if we are unable to raise capital when needed or on attractive terms , we could be forced to delay , reduce or eliminate our research and development programs or any future commercialization effort . 94 december 2016 financing on december 19 , 2016 , we completed a rights offering and a related underwritten offering for the sale of an aggregate of 588,127 common shares resulting in aggregate gross proceeds of approximately $ 24.8 million and net proceeds to us of approximately $ 20.6 million , after deducting underwriting fees and offering expenses . in the rights offering , holders of american depositary shares , or adss , received 0.276 ads rights for each ads owned of record on november 29 , 2016. one ads right entitled an ads holder to subscribe for and purchase one new ads at the subscription price of $ 4.32 per ads , the u.s. dollar equivalent of 4.014 per ads . an aggregate of 1,592,750 adss , representing 159,275 common shares , were subscribed for by holders of adss . each ads represents one tenth of a common share . in the rights offering , holders of common shares received the common share right to subscribe for and purchase 0.276 new common shares , at a subscription price of 40.14 per new common share for each common share owned of record on november 29 , 2016. an aggregate of 102,077 new common shares were subscribed for by holders of common shares . pursuant to an underwriting agreement that we entered into with cantor fitzgerald & co. , dated december 14 , 2016 , cantor fitzgerald & co. agreed to purchase 326,775 common shares , representing all of the unsubscribed common shares in the rights offering , at a purchase price of 40.14 per common share for purposes of resale of adss representing such unsubscribed common shares . 2015 initial public offering on september 23 , 2015 we completed our initial public offering on the nasdaq global market issuing 9,000,000 adss at a price to the public of $ 10.25 per ads , representing 900,000 of our common shares . on september 30 , 2015 the underwriters of our initial public offering exercised in full their over-allotment option to purchase an additional 1,350,000 adss , representing 135,000 common shares , at the initial public offering price of $ 10.25 per ads , less underwriting discounts . including the over-allotment adss we sold an aggregate of 10,350,000 adss representing 1,035,000 common shares , in our initial public offering , which resulted in gross proceeds of approximately $ 106.1 million and net proceeds to us of approximately $ 92.4 million , after deducting underwriting discounts and offering expenses . april 2015 financing in march 2015 , we entered into an agreement with certain existing and new investors to issue and sell common shares with contractual preference rights under a shareholders agreement . we refer to this transaction as our april 2015 financing . in connection with our april 2015 financing , we agreed to sell common shares with contractual preference rights under the shareholders agreement in two tranches . in april 2015 , we closed the sale of the first tranche of 730,162 common shares , including the sale of 511,188 common shares at a price per share of 82.35 ( $ 87.71 ) for 42.1 million ( $ 44.8 million ) in cash consideration and the sale of 218,974 common shares in exchange for certain contributions in kind consisting of the conversion of outstanding convertible loans and silent partnership interests . we also agreed to sell a second tranche of common shares with contractual preference rights under the shareholders agreement to these investors at their option for an aggregate purchase price of $ 70.0 million if we did not complete a public offering in the united states within specified parameters or by a specified date . upon the closing of our initial public offering and issuance of the shares for nominal value in satisfaction of preferred dividends , all contractual preference rights under the shareholders agreement terminated . critical accounting policies our management 's discussion and analysis of our financial condition and results of operations is based on our financial statements , which we have prepared in accordance with generally accepted accounting principles in the united states , or u.s. gaap . the preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the end of the reporting period , as well as the reported revenues and expenses during the reporting periods . story_separator_special_tag if a beneficiary is terminated due to a good leaver event ( within the meaning of the stock option plan 2015 ) , on or prior to the first anniversary of the date of the liquidity event , the beneficiary 's options will be immediately exercisable in full as of the date of such termination . if the acquiring or succeeding corporation ( or an affiliate of the acquiring or succeeding corporation ) refuses to assume the options outstanding under the stock option plan 2015 or to substitute substantially equivalent options therefore , all then-unvested options under the stock option plan 2015 will automatically vest in full upon the liquidity event . for purposes of the stock option plan 2015 , a liquidity event generally refers to an exclusive license of or the sale , lease or other disposal of all or substantially all of our assets , a sale or other disposal ( but not a pledge ) of 50 % or more of our shares , a merger or consolidation of us with or into any third party , or our liquidation , winding up or other form of dissolution of us . unless otherwise specifically permitted in an option agreement or resolved upon by the management board with the approval of the supervisory board , the exercise of vested options is permitted under the stock option plan 2015 only during specified periods and on specified terms in the case of a liquidity event or following an initial public offering occurring during the term of the option . a beneficiary is entitled to exercise vested options at any time during the remaining term of the option while the beneficiary is providing services to us , and within the three-month period following a termination of the beneficiary 's services due to a good leaver event . options granted under the stock option plan 2015 will have a term of no more than ten years from the beneficiary 's date of participation . beneficiaries of options granted under the stock option plan 2015 are not entitled to transfer vested options , except to individuals by way of inheritance or bequest . options do not entitle beneficiaries to exercise any shareholder rights . beneficiaries may exercise shareholder rights only with respect to any shares they hold . we measure the options under our equity incentive plans at fair value at their grant date in accordance with asc 718 , compensation stock compensation , using the black-scholes model . all options under the stock option plan 2007 have an exercise price of 6.72 ( $ 7.32 ) per share and a maturity of september 27 , 2017. the fair value of such share-based compensation is recognized as an expense over the respective vesting period . share-based compensation expense under the stock option plan 2007 was $ 96,000 , $ 78,000 and $ 95,000 for the years ended december 31 , 2014 , 2015 and 2016 , respectively . no options were granted under the stock option plan 2007 during 2015 or 2016. the weighted average fair value of the 1,088 options granted in 2014 was $ 209.11 per share . options granted during the year ended december 31 , 2016 under the stock option plan 2015 have a weighted-average exercise price of 71.64 ( $ 80.24 ) and a weighted average fair value of 27.31 ( $ 30.58 ) . we recognized stock-based compensation expense of approximately $ 2.5 million during the year ending december 31 , 2016 related to the options granted under the stock option plan 2015. we account for related social security contributions as liabilities which are recognized on the date of the event triggering the measurement and payment of the tax to the taxing authority ; or the date the options are exercised . we expect to grant additional stock options that will result in additional share-based compensation expense . following the consummation of our initial public offering , we determined stock option values based on the market price of our common shares . fair value estimation we use valuation techniques that include inputs that are not based on observable market data to estimate 99 the fair value of certain types of financial instruments , including stock options under our equity incentive plans . valuation of total equity and certain financial instruments prior to our initial public offering prior to our initial public offering , the fair value of the total equity was determined by management and took into account the most recently available valuation of the company and the assessment of additional objective and subjective factors we believed were relevant . we considered numerous objective and subjective factors to determine the best estimate of the fair value of the equity and certain financial instruments that represented potential interests in the equity , including the following : · the progress of the research and development programs ; · achievement of enterprise milestones , including the entering into collaboration and licensing agreements ; · contemporaneous third-party valuations of the common shares ; · the forecasted performance and operating results ; · the estimated costs of capital to fund operations ; · the rights and preferences of the financial instruments , e.g . liquidation preference of common shares with contractual preference rights relative to other common shares , conversion rights of the convertible loan agreements , etc . ; · the likelihood of achieving a discrete liquidity event , such as a sale of the company or an initial public offering given prevailing market conditions ; and · external market and economic conditions impacting the industry sector . in determining the fair values of the equity , we considered three generally accepted approaches : the income approach , market approach and cost approach . based on the stage of development and information available , we determined that the income approach was the most appropriate method . discounted cash flow , or dcf , a form of the income
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows comparison of years ended december 31 , 2015 and 2016 the following table summarizes our cash flows for the years ended december 31 , 2015 and 2016 : replace_table_token_18_th operating activities cash flow utilized by operating activities increased by $ 27.4 million from $ 21.9 million for the year ended december 31 , 2015 to $ 49.3 million for the year ended december 31 , 2016 primarily due to a $ 28.4 million increase in net loss , after adjustments for non-cash amounts included in net income partially offset by improved working capital of $ 1.0 million primarily from higher trade payables and other liabilities . investing activities cash flow from investing activities changed by $ 100.1 million from $ 76.7 million cash outflow in the year ended december 31 , 2015 to $ 23.4 million cash inflow in the year ended december 31 , 2016 primarily due to the redemption of 107 term deposits . other investing activities were relatively insignificant in both periods and related primarily to the acquisition of equipment in support of our research and development activities . financing activities cash flow generated from financing activities decreased by $ 110.7 million from $ 133.0 million for the year ended december 31 , 2015 to $ 22.3 million for the year ended december 31 , 2016 primarily due to proceeds of $ 44.8 million from our april 2015 financing and proceeds
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the first one was delivered on march 24 , 2015 and the second will be delivered on march 30 , 2015. the company responded on march 6 to a request for information and prequalification ( rfi ) from the united states postal service ( usps ) for its next generation delivery vehicle ( ngdv ) acquisition program . the usps anticipates making a single award in 2017 to a supplier for up to 180,000 ngdvs to replace its current fleet of mail delivery vehicles . delivery of the ngdvs to the usps is expected to begin no later than january 2018. the usps has stated that it expects to evaluate the submitted rfis and announce a short list of oems in april , who will then submit detailed specifications and build several prototypes for testing . there is no guarantee that the company will be invited to submit detailed specifications or , if it is invited , that the company will be awarded as the supplier . the company expects that it is competing against larger , better financed competitors . we recently announced that we filed a provisional patent for a new system that extends the range of electric vehicles while reducing the overall cost of the typical battery-electric power train . the new system , e-gen drive ( tm ) , is designed specifically for the package delivery vehicle market , in which the diesel and or gasoline-powered vehicles in use now , stop and restart hundreds of times a day . we believe that battery-electric technology is an ideal fit for urban and suburban delivery routes and we understand fleet owner 's concerns about range anxiety and cost . our e-gen drive system will enable them to complete the typical route on all electric power using smaller battery packs , thus reducing the cost of the entire system . our e-gen drive trucks , offer a three-year payback making them price competitive with gasoline-powered trucks . our e-gen has recently been approved by the environmental protection agency for on-road use . we believe this is a very significant step towards adoption of this power train by fleet operators . 24 our association with power solutions international ( psix : nasdaq ) provides us with multi-fuel engines that function as generators . when the ignition is shut off , the engine automatically turns on and recharges the battery pack . when the ignition is turned back on , the engine turns off and the vehicle reverts to all-electric power . the engine and the battery-powered motor are never in use at the same time . it 's not a traditional hybrid , but an emergency-range electric vehicle . as a result , we believe our new design has many benefits , including : · fleet management flexibility : depending on our customer 's driving patterns and fuel cost goals , our e-gen drive train can be remotely adjusted to use more electric power or internal combustion engine ( ice ) power at their choice . · energy efficiency and cost of ownership : we believe our trucks offer our customers an attractive cost of ownership profile when compared to similar products . using a single electric powertrain with a small ice enables us to create a lighter , more energy efficient vehicle that is mechanically simple . since we are able to use smaller battery packs , we can reduce the cost of the entire system . additionally , government incentives can reduce the cost of ownership even further . · high performance : we believe our trucks deliver an unparalleled driving experience with powerful acceleration for the most demanding applications with the added benefit of a very quiet operation . we also announced the second generation , full-electric truck “ e-100 ” which is a significant improvement to our first generation vehicle . the second-generation vehicle includes a single powerful electric motor with no transmission and new lighter , high-density lithium ion batteries giving the vehicle a range of up to 100 miles . in march of 2013 , we purchased the former workhorse custom chassis assembly plant in union city , indiana from a subsidiary of navistar international ( nav : nyse ) . with this acquisition , we intend to become an original equipment manufacturer ( oem ) of class 3-6 commercial-grade , medium-duty truck chassis to be marketed under the workhorse® brand . we will need to raise significant capital in order to commence manufacturing at the union city facility . ownership and operation of this plant enables us to build new chassis with gross vehicle weight capacities of between 10,000 and 26,000 pounds and offer them in four different fuel variants—electric , gas , propane , and compressed natural gas ( cng ) . we plan to offer commonly known workhorse chassis like the w22 , w42 , w62 , as well as a new , 88 ” track , w88 truck chassis that will be offered to fleet purchasing managers at price points that are both attractive and cost competitive . at the same time , amp intends to partner with engine suppliers and body fabricators to offer fleet-specific , custom , purpose-built chassis that provide total cost of ownership solutions that are superior to the competition . in addition to having the ability to build our own chassis , we design and produce battery-electric power trains that can be installed in new workhorse chassis for class 3-6 medium-duty vehicles from diesel or gasoline power to electric power . our approach is to provide battery-electric power trains utilizing proven , automotive-grade , mass-produced parts in its architecture coupled with in-house control software that we have developed over the last five years . story_separator_special_tag the workhorse custom chassis acquisition includes other important assets including the workhorse brand and logo , intellectual property , schematics , logistical support from up-time parts ( a navistar subsidiary ) and , perhaps most importantly , a network of 400-plus sales and service outlets across north america . we believe combination of amp 's chassis assembly capability , coupled with its ability to offer an array of fuel choices , gives amp/workhorse a unique opportunity in the marketplace . our unique horsefly line of drones is designed to be the ‘ last mile ' solution in delivery logistics . we worked with the university of cincinnati to develop the horsefly to meet the rigors of package delivery and to have eight rotors and redundant systems to ensure safety in the air . today , we estimate that it costs approximately $ 1 to move a 20,000-pound diesel-powered truck one mile . while we believe our workhorse trucks can reduce the standard delivery costs from $ 1 to less than $ 0.30 cents per mile based on current costs of fuel , we expect that having drones handle the last leg of delivery could further potentially reduce the cost to about $ .03 cents for the last mile . the all weather horsefly battery-powered drone will carry up to 10 pounds of cargo with a 15-mile range . it is designed to meet the anticipated faa drone guidelines expected in 2015 , of which there is no guarantee , and is differentiated from other drones as it is designed to work in tandem with a workhorse electric truck . horsefly will deliver packages , loaded on-route by the truck 's driver , to remote locations while the driver continues on the main delivery route . horsefly will then rejoin the truck at its new location after its delivery is completed , saving the fleet operator much of the time and fuel cost of the last , most expensive , mile . also while the horsefly is atop the workhorse truck , it can quickly charge its batteries from the truck 's large battery pack . we believe this implementation is superior to the proposed deployment of other delivery drones wherein the package is loaded at a distant warehouse and the drone must make a round trip flight to the delivery address and back to the warehouse . other applications for the horsefly include transmission line inspections and agricultural surveys . 25 results of operations our condensed consolidated statement of operations data for the period presented follows : replace_table_token_5_th revenue we generated revenue of $ 177 thousand for year ended december 31 , 2014 for the delivery of an all-electric para-transit 12 passenger bus to barta ( berks county regional transit authority ) of pennsylvania . we generated revenue of $ 177 thousand for the year ended december 31 , 2013 for half of the order to barta delivered during 2013. direct costs charged to operations were $ 177 thousand for the years ended december 31 , 2014 and 2014. we have received several orders from fleets which we are in the process of filling and that we expect to deliver in the next 12 months . selling , general and administrative expenses selling , general and administrative expenses consist primarily of personnel and facilities costs related to our development including , marketing , sales , executive , finance , human resources , information technology and professional , legal and contract services . selling , general and administrative expenses during the years ended december 31 , 2014 and 2013 were $ 2.9 million and $ 3.1 million , respectively . the $ 186 thousand decrease is mainly due to a reduction in stock based compensation . research and development expenses research and development expenses consist primarily of personnel costs for our teams in engineering and research , prototyping expense , and contract and professional services . union city plant expenses prior to the start of production are also included in research and development expenses . research and development expenses during the years ended in december 31 , 2014 and 2013 were approximately $ 3.4 million and $ 2.9 million respectively . the $ 544 thousand increase is the result of higher engineering consulting expense as well as increments in motors and batteries for e-gen prototypes . interest expenses our interest expense is incurred primarily from our long term loan with navistar in connection to the purchase of the union city plant mentioned before in the property , plant and equipment and long term loan notes to the financial statements . interest expenses during the year ended in december 31 , 2014 and 2013 were approximately $ 399 thousand and $ 258 thousand , respectively , an increase of $ 141 thousand mainly due to higher principal on the navistar loan after capitalization of the first year interests and commissions on the notes payable mentioned on note 4 of the financial statements . 26 story_separator_special_tag amp converts existing internal combustion engine based vehicles to all electric powertrains , provides original equipment manufacturers ( oem 's ) with amp designed and integrated modular electric components , and provides electric powertrain engineering to end-users . amp has not recorded significant revenue since inception in february 2007 , and is developing its operations through a sale , design and manufacturing facility located near cincinnati , ohio . use of estimates the preparation of financial statements in conformity with accounting principles generally accepted in the united states of america requires management to make estimates and assumptions that affect certain reported amounts and disclosures . accordingly , actual results could differ from those estimates . property and depreciation property and equipment is recorded at cost . depreciation is provided on the straight-line and accelerated methods over the estimated useful lives of the respective assets . income taxes with the consent of its shareholders , at the date of inception , amp elected under the internal revenue code
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources summary of cash flows replace_table_token_6_th cash flows from operating activities our cash flows from operating activities are affected by our cash investments to support the business in research and development , manufacturing , selling , general and administrative . our operating cash flows are also affected by our working capital needs to support fluctuations in inventory , personnel expenses , accounts payable and other current assets and liabilities . net cash used in operating activities was $ 4.5 million during the year ended december 31 , 2014. the largest component of our cash used during this was to our net loss of $ 6.6 million , which included non-cash charges such as depreciation of $ 388 thousand , stock based compensation of $ 400 thousand , consulting services paid in stock of $ 932 thousand , interest paid in kind of $ 225 thousand on the navistar long term loan . operating cash outflows for the year ended december 31 , 2014 were primarily related to research and development expenses of $ 3.4 million and operating expenses of $ 3.2 million . net cash used in operating activities was $ 2.7 million during the year ended december 31 , 2013. the main component of our cash used during this periods related to our net loss of $ 6.1 million , which included non-cash charges such as depreciation of $ 319 thousand , stock based compensation of $ 1.4 million and consulting services paid in stock of $ 1.1 million .
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as a result , changes in the value of these foreign currencies relative to the u.s. dollar have significantly impacted our results of operations and may impact our future results of operations . beginning in the fourth quarter of 2014 , the value of the u.s. dollar strengthened in comparison to certain foreign currencies , including in europe , brazil and australia , and continued to strengthen during the first half of 2015. since approximately 35 % of our revenue is denominated in foreign currency , our revenue results have been negatively impacted , and we expect will continue to be impacted , by fluctuations in foreign currency exchange rates . we have evaluated , and expect to continue to evaluate , possible acquisitions and other strategic transactions designed to expand our business and or add complementary products and technologies to our existing product sets . as a result , our expected uses of cash could change , our cash position could be reduced and we may incur additional debt obligations to the extent we complete additional acquisitions . we believe that existing cash balances , together with funds generated from operations and amounts available under our credit facility will be sufficient to finance our operations and meet our foreseeable cash requirements through at least the next twelve months . results of operations fiscal year 2015 compared to fiscal year 2014 revenue fiscal year ended percentage change ( in thousands ) november 30 , 2015 november 30 , 2014 as reported constant currency revenue $ 377,554 $ 332,533 14 % 21 % total revenue increased $ 45.0 million , or 14 % , in fiscal year 2015 as compared to fiscal year 2014 . revenue would have increased by 21 % if exchange rates had been constant in fiscal year 2015 as compared to exchange rates in fiscal year 2014. the increase in revenue in fiscal year 2015 was a result of an increase in both license and maintenance and services revenue , primarily due to the impact of our acquisitions of telerik in december 2014 and bravepoint during the fourth fiscal quarter of 2014. changes in prices from fiscal year 2014 to fiscal year 2015 did not have a significant impact on our revenue . 19 license revenue replace_table_token_4_th software license revenue increased $ 12.4 million , or 11 % , in fiscal year 2015 as compared to fiscal year 2014 . software license revenue would have increased by 18 % if exchange rates had been constant in fiscal year 2015 as compared to exchange rates in effect in fiscal year 2014. the increase in license revenue was primarily in the north america and asia pacific regions as a result of incremental license revenue from the acquisition of telerik . in addition to the incremental license revenue from telerik , both openedge and the data connectivity and integration business segment showed strong growth in fiscal year 2015 on a constant currency basis , both to partners , as well as to direct end users . maintenance and services revenue replace_table_token_5_th maintenance and services revenue increased $ 32.6 million in fiscal year 2015 as compared to fiscal year 2014 . maintenance revenue increased 8 % and professional services revenue increased 142 % compared to the prior year . the increase in maintenance revenue was primarily in the north america region , due in large part to the incremental revenue associated with the telerik acquisition , as well as our strong openedge maintenance renewal rate of over 90 % . the increase in professional services revenue was primarily due to the impact of the bravepoint acquisition . revenue by region replace_table_token_6_th total revenue generated in north america increased $ 56.9 million , and total revenue generated outside north america decreased $ 11.8 million , in fiscal year 2015 as compared to fiscal year 2014 . the increase in north america was primarily due to the impact of the telerik and bravepoint acquisitions . in addition to the incremental revenue from telerik and bravepoint , the increase in north america was due to strong openedge license sales both to our partners and direct end users , growth in data connectivity and integration license sales to our oem channel , and strong maintenance renewals . 20 the decreases in emea and latin america of 5 % and 29 % , respectively , were primarily due to the impact of the stronger u.s. dollar . if exchange rates had been constant in fiscal year 2015 as compared to exchange rates in effect in fiscal year 2014 , revenue generated in emea would have increased 7 % year over year , while revenue generated in latin america would have decreased by 8 % . the 10 % increase in asia pacific was primarily due to the impact of the telerik acquisition and revenue generated in the asia pacific region would have increased by 22 % if exchange rates had been constant in fiscal year 2015 as compared to exchange rates in effect in fiscal year 2014. total revenue generated in markets outside north america represented 45 % of total revenue in fiscal year 2015 compared to 55 % of total revenue in fiscal year 2014 . total revenue generated in markets outside north america would have represented 48 % of total revenue if exchange rates had been constant in fiscal year 2015 as compared to the exchange rates in effect in fiscal year 2014 . revenue by segment replace_table_token_7_th revenue in the openedge segment decreased $ 0.8 million in fiscal year 2015 as compared to fiscal year 2014 , due to a decrease in maintenance revenue primarily in the emea region as a result of the impact of the stronger u.s. dollar , partially offset by incremental services revenues as a result of the bravepoint acquisition . story_separator_special_tag the decrease in cost of maintenance and services in fiscal year 2014 is primarily due to lower compensation-related costs as a result of the significant decrease in headcount within our customer support organization compared to fiscal year 2013 , which more than offset the increase in costs of services due to the acquisition of bravepoint during the fourth quarter of fiscal year 2014 . 27 amortization of acquired intangibles fiscal year ended ( in thousands ) november 30 , 2014 november 30 , 2013 percentage change amortization of acquired intangibles $ 2,999 $ 1,340 124 % as a percentage of total revenue 1 % — % amortization of acquired intangibles included in costs of revenue primarily represents the amortization of the value assigned to intangible assets for technology obtained in business combinations . amortization of acquired intangibles increased $ 1.7 million in fiscal year 2014 as compared to fiscal year 2013. the increase was due to amortization of intangible assets acquired as a result of the rollbase and modulus acquisitions , which were completed at the end of the second quarter of fiscal year 2013 and 2014 , respectively , and the bravepoint acquisition completed during the fourth quarter of fiscal year 2014 , partially offset by decreases due to the completion of amortization of certain intangible assets acquired in prior years . gross profit fiscal year ended ( in thousands ) november 30 , 2014 november 30 , 2013 percentage change gross profit $ 298,274 $ 299,014 — % as a percentage of total revenue 90 % 90 % our gross profit decreased $ 0.7 million in fiscal year 2014 as compared to fiscal year 2013 , and our gross profit as a percentage of total revenue was 90 % for both periods . the dollar decrease in our gross profit was primarily due to lower license revenue offset by lower cost of maintenance and services . sales and marketing fiscal year ended ( in thousands ) november 30 , 2014 november 30 , 2013 percentage change sales and marketing $ 101,496 $ 105,997 ( 4 ) % as a percentage of total revenue 31 % 32 % sales and marketing expenses decreased $ 4.5 million in fiscal year 2014 as compared to fiscal year 2013 , and decreased as a percentage of total revenue from 32 % to 31 % . the decrease was primarily due to lower compensation-related and travel costs in the sales function , as well as lower commission expense due to the lower level of license bookings as compared to fiscal year 2013. the decrease in costs in these areas was slightly offset by an increase in stock based compensation expense during the third quarter of fiscal year 2014 due to accelerated vesting of restricted stock units in connection with the termination of employment of our senior vice president of global field operations . marketing expenses were relatively consistent between the periods . product development replace_table_token_19_th 28 product development expenses increased $ 1.6 million in fiscal year 2014 as compared to fiscal year 2013 , and increased as a percentage of revenue from 17 % to 18 % . the increase was primarily due to higher costs related to building our progress pacific platform . the increase was partially offset by the deferral of capitalized product development costs related to certain development activities with respect to our cloud and mobile platforms beginning in the fourth quarter of fiscal year 2013 , as well as lower incentive compensation costs . general and administrative fiscal year ended ( in thousands ) november 30 , 2014 november 30 , 2013 percentage change general and administrative $ 48,292 $ 55,994 ( 14 ) % as a percentage of total revenue 15 % 17 % general and administrative expenses include the costs of our finance , human resources , legal , information systems and administrative departments . general and administrative expenses decreased $ 7.7 million in fiscal year 2014 as compared to fiscal year 2013 , and decreased as a percentage of revenue from 17 % to 15 % . the decrease is primarily related to lower compensation-related costs as a result of headcount reduction actions occurring subsequent to the third quarter of fiscal year 2013 , as well as lower incentive compensation and professional services costs . the decrease in costs in these areas was slightly offset by an increase in stock based compensation expense during the third quarter of fiscal year 2014 due in part to accelerated vesting of restricted stock units in connection with the termination of employment of our senior vice president of human resources . amortization of acquired intangibles fiscal year ended ( in thousands ) november 30 , 2014 november 30 , 2013 percentage change amortization of acquired intangibles $ 653 $ 760 ( 14 ) % as a percentage of total revenue — % — % amortization of acquired intangibles included in operating expenses primarily represents the amortization of value assigned to intangible assets obtained in business combinations other than assets identified as purchased technology . amortization of these acquired intangibles decreased 14 % in fiscal year 2014 as compared to fiscal year 2013 due to the completion of amortization of certain intangible assets acquired in prior years , offset by the amortization of intangible assets associated with the rollbase and modulus acquisitions , which were completed during the second quarter of fiscal years 2013 and 2014 , respectively , and the bravepoint acquisition , which was completed in the fourth quarter of fiscal year 2014. restructuring expenses fiscal year ended ( in thousands ) november 30 , 2014 november 30 , 2013 percentage change restructuring expenses $ 2,266 $ 11,983 ( 81 ) % as a percentage of total revenue 1 % 4 % we incurred restructuring expenses of $ 2.3 million in fiscal year 2014 as compared to $ 12.0 million in fiscal year 2013. restructuring expenses in fiscal year 2014 relate to the restructuring actions occurring in fiscal years
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows from operating activities replace_table_token_24_th the decrease in cash generated from operations in fiscal year 2015 as compared to fiscal year 2014 was primarily due to lower income from operations during fiscal year 2015 as compared to fiscal year 2014 as a result of incremental costs resulting from the telerik and bravepoint acquisitions , partially offset by changes in operating assets and liabilities mainly driven by the $ 37.8 million increase in our total deferred revenue from the end of fiscal year 2014 due to the acquisition of telerik . in addition , our gross accounts receivable as of november 30 , 2015 decreased by $ 2.3 million from the end of fiscal year 2014 . days sales outstanding ( dso ) in accounts receivable was 52 days at the end of fiscal year 2015 , compared to 63 days at the end of fiscal year 2014 and 66 days at the end of fiscal year 2013. we target a dso range of 60 to 75 days . the increase in cash generated from operations in fiscal year 2014 as compared to fiscal year 2013 was primarily due to $ 56.3 million in payments made in fiscal year 2013 for income taxes related to the divestitures of the product lines discussed in note 7 to the consolidated financial statements in item 8 of this form 10-k , as well as an additional $ 14.5 million in payments related to the restructuring activities in fiscal year 2013 as compared to fiscal year 2014 and higher income from operations . total net tax payments made in fiscal year 2014 were $ 7.3
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in response to continued commodity price volatility , in 2017 the company entered into commodity derivatives to secure the pace of its strategically important capital program at alpine high without compromising its financial strength or flexibility . we continuously monitor changes in our operating environment and have the ability , with our dynamic capital allocation process , to adjust our capital investment program to levels that maximize value for our shareholders over the long-term . outlook apache currently plans to invest $ 7.5 billion in its upstream oil and gas activities from 2018 to 2020 , with just under $ 2.5 billion planned for 2018 and slight increases to annual capital spending through 2019 and 2020. additionally , the company anticipates investment of $ 1.0 billion in the midstream development of alpine high over the next three years . this will include approximately $ 500 million in 2018 , with the remainder split between 2019 and 2020. at current pricing , 2018 projected cash flow from operations are estimated to be cash flow neutral based on the upstream capital program , inclusive of the current company dividend of $ 380 million . midstream development and infrastructure build-out will operate at a cash deficit . any cash deficits for 2018 are anticipated to be funded through our existing cash balances ; however , the company continues discussions on strategic midstream monetization and value optimization that could significantly reduce , or even eliminate , the deficit . 27 the results of this planned capital investment are projected to achieve a compound annual production growth rate of 11 to 13 percent for apache 's worldwide operations and 19 to 22 percent in the u.s. over the three-year period . for 2018 , apache 's worldwide adjusted production is anticipated to increase by 7 to 13 percent . projected growth rates will be driven by the permian basin . egypt and the north sea operations are anticipated to continue generating cash flow in excess of capital investments . forecasts show a shallow decline rate for the international regions given planned investment levels ; however , the company anticipates improved capital efficiency in the north sea with lower day rate contracts by mid-year and fewer obligation wells expected to be drilled . approximately two-thirds of apache 's capital upstream spending from 2018 to 2020 will be allocated to the permian basin . outside of alpine high , capital investment will be focused on horizontal oil drilling in the midland and delaware basins and on moderating the central basin platform decline through continued improved recovery projects . investment levels could be significantly increased to provide short-term oil growth ; however , a deeper understanding of multi-zone reservoir dynamics on a section level will lead to more economic full-field development decisions over the long-term . the company 's current rig and completion pace allows for sufficient time to collect and analyze complex inter-well and inter-zone data and design optimal spacing and pattern configurations . with most of the company 's key midland basin acreage held-by-production , we have time available to ensure long-term value and returns before accelerating our development pace in the context of available cash flow . the upstream capital investment program for alpine high will continue to transition from delineation and testing to full development mode , while infrastructure build-out will progress through 2018 and into 2019. during 2018 , approximately 50 percent of the drilling program will focus on completing the primary phase of delineation and testing . the remaining capital included in the three-year plan will be split evenly between retention drilling and development drilling . the alpine high program is expected to progress at a steady and increasingly efficient pace with continued well optimization and a greater proportion of future drilling on multi-well pads . combined with minimal water handling costs and revenue uplift expected from oil and ngls present in the wet gas portion of the play , alpine high investments are anticipated to generate strong cash margins with a competitive recycle ratio compared to other permian operations . operational highlights apache 's deliberate focus on strategic testing and targeted development drilling during the price downturn , in addition to the alpine high discovery , significantly impacted results in its permian basin plays , egypt , and the north sea . key operational highlights for the year include : north america north america onshore production averaged 231 mboe/d , down 16 percent relative to 2016 , reflecting apache 's exit from canada . excluding canada , apache 's onshore equivalent production decreased 8 percent , in line with the company 's expectations given the significant reduction in capital investments over the preceding two years and the allocation of a significant portion of our 2017 capital investments to infrastructure at alpine high . the permian region averaged 16 operated rigs during the year , drilling 215 gross wells , 145 net wells . approximately half of the region 's production is crude oil and 23 percent is ngls . combined , this represents more than a third of apache 's worldwide liquids production for 2017. the region averaged 158 mboe/d and contributed $ 1.8 billion of revenues during 2017. fourth-quarter 2017 production increased 19 percent from the comparative 2016 quarter , a reflection of the success of the midland basin drilling program and the continued production ramp at alpine high . drilling and infrastructure development activities continue at alpine high ; specifically : ◦ first production from the alpine high play was achieved in early may 2017. net production averaged approximately 19.8 mboe/d during the fourth quarter of 2017 and achieved a rate of 25 mboe/d in december prior to shutting down a facility at year-end for capacity expansion . ◦ five processing facilities are currently operating with a combined gross inlet capacity of 330 million cubic feet of natural gas per day ( mmcf/d ) . story_separator_special_tag 2016 vs. 2015 exploration expenses in 2016 decreased $ 2.3 billion , or 83 percent , compared to 2015 , primarily a result of stabilizing commodity and leasehold prices reducing unproved leasehold impairments during 2016 in all key geographic areas . dry hole expense decreased $ 52 million primarily as a result of reduced capital spending during 2016. geological and geophysical expense decreased by $ 45 million during 2016 compared to 2015 as a result of reduced capital spending . general and administrative ( g & a ) expenses 2017 vs. 2016 g & a expenses decreased $ 15 million , or 4 percent , from 2016 . the decrease in g & a expense was primarily related to lower incentive compensation in 2017 compared to 2016 , and the canadian divestitures . 2016 vs. 2015 g & a expenses increased $ 30 million , or 8 percent , from 2015 . on a per-unit basis , g & a expenses increased $ 0.23 to $ 2.15 per boe . the increase in g & a expense was primarily related to non-cash stock-based compensation expense . transaction , reorganization , and separation costs apache recorded $ 16 million , $ 39 million and $ 132 million of expenses during 2017 , 2016 , and 2015 , respectively , primarily related to company reorganization , including separation costs , investment banking fees and other associated costs . the charges for 2017 include $ 11 million for consulting fees related to divestitures and $ 5 million related to employee separation , consolidation of office space , and other reorganization efforts . 35 depreciation , depletion and amortization ( dd & a ) 2017 vs. 2016 oil and gas property dd & a expense of $ 2.1 billion in 2017 decreased $ 324 million compared to 2016 . the company 's oil and gas property dd & a rate decreased $ 0.14 per boe in 2017 compared to 2016 . the primary factor driving lower absolute dollar expense was a decrease in production volumes from the comparative prior-year periods . other asset depreciation decreased $ 14 million compared to 2016 primarily related to the canadian divestitures . 2016 vs. 2015 oil and gas property dd & a expense of $ 2.5 billion in 2016 decreased $ 516 million compared to 2015 . the company 's oil and gas property dd & a rate decreased $ 2.09 to $ 12.92 per boe in 2016 compared to 2015 . the primary factor driving both lower absolute dollar expense and lower dd & a per boe rates was the reduction in the carrying value of the company 's oil and gas properties as a result of impairments to proved properties in 2015 and 2016. other asset depreciation decreased $ 166 million compared to 2015 primarily related to a reduction in the company ' s gas gathering , transmission , and processing ( gtp ) assets as a result of impairments to gtp assets during 2015. impairments during 2017 , the company recorded asset impairments in connection with fair value assessments totaling $ 8 million for a u.k. prt decommissioning asset that is no longer expected to be realizable from future abandonment activities in the north sea . during 2016 , the company recorded asset impairments totaling $ 1.1 billion in connection with fair value assessments , including $ 486 million for the impairment of the recoverable value of the prt decommissioning asset , $ 427 million impairments of oil and gas proved properties in the u.s. and canada , $ 135 million impairments of certain gtp facilities in the north sea , and $ 55 million for inventory write-downs . during 2015 , the company recorded asset impairments totaling $ 9.5 billion , including $ 7.4 billion impairments of oil and gas proved properties , $ 1.7 billion impairments of gtp facilities , a $ 148 million impairment of its yphpl equity method investment , $ 163 million impairment of goodwill in its north sea reporting unit , and $ 55 million for inventory write-downs . oil and gas proved property impairments resulted from lower commodity prices and downward revisions of reserves resulting from changes to the company 's development plans in certain areas . gtp impairments included $ 555 million for facilities in canada , $ 102 million in the u.s. , and $ 1.1 billion in egypt . the following table presents a summary of asset impairments recorded for 2017 , 2016 , and 2015 : replace_table_token_18_th 36 financing costs , net financing costs incurred during the period comprised the following : replace_table_token_19_th 2017 vs. 2016 net financing costs decrease d $ 20 million from 2016 . the decrease is primarily related to an increase of $ 11 million in interest income , an increase of $ 3 million in capitalized interest , and a decrease of $ 7 million in interest expense . 2016 vs. 2015 net financing costs decrease d $ 94 million from 2015 . the decrease is primarily related to an increase of $ 33 million in capitalized interest , a decrease of $ 22 million in interest expense , and a $ 39 million loss on the early extinguishment of debt incurred in 2015. provision for income taxes the 2017 income tax benefit totaled $ 585 million . during 2017 , apache 's effective tax rate was impacted primarily by the decrease in deferred taxes associated with its investments in foreign subsidiaries , gains on the sale of oil and gas properties , the increase in the company 's valuation allowance , and a decrease in the u.s. corporate income tax rate causing a remeasurement of the company 's deferred tax asset . on december 22 , 2017 the tax cuts and jobs act ( the act ) was signed into law . in addition to reducing the u.s. corporate income tax rate from 35 percent to 21 percent effective january 1 , 2018 , certain provisions in the
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | net cash provided by continuing operating activities operating cash flows are the company 's primary source of capital and liquidity and are impacted , both in the short-term and the long-term , by volatile oil and natural gas prices . the factors that determine operating cash flows are largely the same as those that affect net earnings , with the exception of non-cash expenses such as dd & a , asset retirement obligation ( aro ) accretion , exploratory dry hole expense , asset impairments , and deferred income tax expense . net cash provided by continuing operating activities for 2017 totaled $ 2.4 billion , down $ 25 million from 2016 . the decrease is primarily a result of changes in working capital . for a detailed discussion of commodity prices , production , and expenses , please see “ results of operations ” in this item 7. for additional detail on the changes in operating assets and liabilities and the non-cash expenses that do not impact net cash provided by operating activities , please see the statement of consolidated cash flows in the consolidated financial statements set forth in part iv , item 15 of this form 10-k. australia discontinued operations during 2015 , apache completed the sale of its wheatstone lng project and associated upstream assets to woodside for total proceeds of $ 2.8 billion . during 2015 , apache also completed the sale of its australian subsidiary ael to a consortium of private equity funds managed by macquarie capital group limited and brookfield asset management inc. for total proceeds of $ 1.9 billion . the results of operations for the divested australian assets , asset impairments , and losses on disposal are classified as discontinued operations in all periods presented in this annual report on form 10-k. 40 asset divestitures during 2017 , 2016 , and 2015 , apache recorded proceeds from divestitures totaling $ 1.4 billion , $ 134 million , and $ 1.5 billion , respectively .
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on the distribution date , each of the shareholders of itt received one share of xylem common stock for every one share of common stock of itt held on the record date . the spin-off was completed pursuant to the distribution agreement , dated as of october 25 , 2011 , among itt , exelis inc. and xylem . after the distribution date , itt does not beneficially own any shares of xylem common stock and , following such date , financial results of xylem will not be consolidated in itt 's financial reporting . xylem 's registration statement on form 10 filed with the u.s. securities and exchange commission was declared effective on october 6 , 2011. xylem 's common stock began regular-way trading on the new york stock exchange on november 1 , 2011 under the symbol xyl . executive summary xylem reported revenue for 2011 of $ 3,803 million , an increase of 18.8 % from $ 3,202 million reported in 2010 , due to broad-based growth across both segments . operating income for the year ended 2011 , excluding costs of $ 87 million incurred to execute the separation from itt , was $ 482 million , reflecting an increase of $ 94 million or 24.2 % compared to $ 388 million in 2010. additional financial highlights for 2011 include the following : net income of $ 279 million , or $ 1.50 per diluted share order growth of 18.8 % over the prior year ; organic orders were up 6.7 % revenue increase of 18.8 % from 2010 ; organic revenue was up 7.1 % completion of the ysi incorporated ( ysi ) acquisition , which contributed approximately $ 35 million of revenue to the water infrastructure segment results adjusted net income of $ 358 million , an increase of $ 72 million from 2010 's adjusted net income free cash flow generation of $ 388 million , up $ 87 million from 2010 key performance indicators and non-gaap measures management reviews key performance indicators including revenue , segment operating income and margins , earnings per share , orders growth , and backlog , among others . in addition , we consider certain measures to be useful to management and investors evaluating our operating performance for the periods presented , and provide a tool for evaluating our ongoing operations , liquidity and management of assets . this information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives , including , but not limited to , dividends , acquisitions , share repurchases and debt repayment . these metrics , however , are not measures of financial performance under accounting principles generally accepted in the united states of america ( gaap ) and should not be considered a substitute for revenue , operating income , net income , earnings per diluted share or net cash from continuing operations as determined in accordance with gaap . we consider the following non-gaap measures , which may not be comparable to similarly titled measures reported by other companies , to be key performance indicators : organic revenue and organic orders defined as revenue and orders , respectively , excluding the impact of foreign currency fluctuations , intercompany transactions and contributions from acquisitions and divestitures . divestitures include sales of insignificant portions of our business that did not meet the criteria for classification as a discontinued operation . the period-over-period change resulting from foreign currency fluctuations assumes no change in exchange rates from the prior period . 34 adjusted net income and adjusted earnings per share defined as net income and earnings per share , respectively , adjusted to exclude non-recurring separation costs associated with the spin-off and tax-related special items . a reconciliation of adjusted net income is provided below . replace_table_token_6_th ( a ) subsequent to the spin-off , on october 31 , 2011 , we had 184.6 million shares of common stock outstanding and this share amount is being utilized to calculate diluted earnings per share for all periods prior to october 31 , 2011 presented . operating expenses excluding separation costs defined as operating expenses , adjusted to exclude non-recurring costs incurred in connection with the separation . adjusted segment operating income defined as segment operating income , adjusted to exclude non-recurring costs incurred in connection with the separation and adjusted segment operating margin defined as adjusted segment operating income divided by total segment revenue . free cash flow defined as net cash provided by operating activities less capital expenditures and other significant items that impact current results which management believes are not related to our ongoing operations and performance . our definition of free cash flow does not consider certain non-discretionary cash payments , such as debt . the following table provides a reconciliation of free cash flow for the three year period ended december 31 , 2011. replace_table_token_7_th ( a ) includes the separation costs allocated by itt that have been treated as though they were settled in cash , and capital expenditures associated with the spin-off of $ 11 million . results of operations : ( in millions ) replace_table_token_8_th 35 year ended december 31 , 2011 compared to year ended december 31 , 2010 revenue revenue generated for 2011 was $ 3,803 million , an increase of $ 601 million , or 18.8 % , compared to $ 3,202 million in the same period of 2010. the following table illustrates the impact from organic growth , recent acquisitions , and fluctuations in foreign currency , in relation to revenue during the annual 2011 period . story_separator_special_tag contractual obligations the following table summarizes our contractual commitments as of december 31 , 2011 : replace_table_token_20_th 44 in addition to the amounts presented in the table above , we have recorded liabilities for uncertain tax positions of $ 5 million . these amounts have been excluded from the contractual obligations table due to an inability to reasonably estimate the timing of such payments in individual years . ( 1 ) refer to note 8 , credit facilities and long-term debt , in the notes to the consolidated financial statements for discussion of the use and availability of debt and revolving credit agreements . amounts represent principal payments of long-term debt including current maturities and exclude unamortized discounts . ( 2 ) amounts represent estimate of future interest payments on long-term debt outstanding as of december 31 , 2011 . ( 3 ) represents unconditional purchase agreements that are enforceable and legally binding and that specify all significant terms to purchase goods or services , including fixed or minimum quantities to be purchased ; fixed , minimum or variable price provisions ; and the approximate timing of the transaction . purchase agreements that are cancellable without penalty have been excluded . ( 4 ) other long-term obligations include estimated environmental payments . we estimate , based on historical experience , that we will spend between $ 2 million and $ 4 million per year on environmental investigation and remediation . at december 31 , 2011 , we had estimated and accrued $ 15 million related to environmental matters . off-balance sheet arrangements as of december 31 , 2011 , we have issued guarantees for the debt and other obligations of consolidated subsidiaries . we do not consider the maximum exposure to be material either individually or in the aggregate . critical accounting estimates the preparation of financial statements in conformity with gaap requires management to make estimates and assumptions that affect the reported amounts of assets , liabilities , revenues and expenses , and the disclosure of contingent liabilities . management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . significant accounting policies used in the preparation of the consolidated financial statements are discussed in note 1 , summary of significant accounting policies , in the notes to the consolidated financial statements . accounting estimates and assumptions discussed in this section are those that we consider most critical to an understanding of our financial statements because they are inherently uncertain , involve significant judgments , include areas where different estimates reasonably could have been used , and changes in the estimate that are reasonably possible could materially impact the financial statements . management believes that the accounting estimates employed and the resulting balances are reasonable ; however , actual results in these areas could differ from management 's estimates under different assumptions or conditions . revenue recognition . we recognize revenue when persuasive evidence of an arrangement exists , delivery has occurred , the sales price is fixed or determinable , and collectability of the sales price is reasonably assured . for product sales , delivery does not occur until the products have been shipped , risk of loss has been transferred to the customer and the contractual terms have been fulfilled . in instances where contractual terms include a provision for customer acceptance , revenue is recognized when either ( i ) we have previously demonstrated that the product meets the specified criteria based on either seller- or customer-specified objective criteria or ( ii ) upon formal acceptance received from the customer where the product has not been previously demonstrated to meet customer-specified objective criteria . revenue on service and repair contracts is recognized after services have been agreed to by the customer and rendered . we enter into contracts to sell our products and services , and while the majority of our sales agreements contain standard terms and conditions , certain agreements contain multiple elements or non-standard terms and conditions . where sales agreements contain multiple elements or non-standard terms and conditions , 45 judgment is required to determine the appropriate accounting , including whether the deliverables specified in these agreements should be treated as separate units of accounting for revenue recognition purposes , and , if so , how the transaction price should be allocated among the elements and when to recognize revenue for each element . when a sale involves multiple deliverables , the total revenue from the arrangement is allocated to each unit of accounting based on the relative selling price of the deliverable to all other deliverables in the contract . revenue for multiple element arrangements is recognized when the appropriate revenue recognition criteria for the individual deliverable have been satisfied . the allocation of sales price between elements may impact the timing of revenue recognition , but will not change the total revenue recognized on the arrangement . for delivered elements accounted for as separate units of accounting in a multiple element arrangement , revenue is recognized only when the delivered elements have standalone value , there are no uncertainties regarding customer acceptance and there are no customer-negotiated refund or return rights affecting the sales recognized . certain businesses enter into long-term construction-type sales contracts for which revenue is recognized under the percentage-of-completion method based upon percentage of costs incurred to total costs . we record a reduction in revenue at the time of sale for estimated product returns , rebates and other allowances , based on historical experience and known trends . warranty accrual . accruals for estimated expenses related to warranties are made at the time products are sold or services are rendered and are recorded as a component of cost of revenue . these accruals are established using historical
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources the following table summarizes our sources and uses of cash for the three years ended december 31 , 2011. replace_table_token_19_th sources and uses of liquidity operating activities during 2011 , net cash provided by operating activities was $ 449 million , compared to $ 395 million in 2010. the $ 54 million year-over-year increase is primarily the result of lower tax and restructuring payments . this increase was partially offset by net increased uses of cash in working capital driven by spending to support increased sales volumes . during 2010 , net cash provided by operating activities increased by $ 25 million as compared to 2009 , primarily attributable to a $ 88 million increase in net income , excluding non-cash increases in depreciation and amortization , partially offset by a reduced source of cash from working capital . 42 investing activities cash used in investing activities was $ 423 million for 2011 , compared to $ 1,093 million in 2010 and $ 84 million in 2009. we invested $ 309 million related to the acquisition of ysi in 2011 and $ 385 million and $ 580 million related to the acquisitions of nova and godwin pumps , respectively , in 2010. capital expenditures in 2011 were $ 126 million compared to $ 94 million in 2010 and $ 62 million in 2009. the $ 32 million year-over-year increase in capital expenditures in 2011 is primarily due to investments to increase productivity and the expansion of the godwin business . financing activities during 2011 , cash provided by financing activities was $ 172 million , compared to cash provided by financing activities of $ 745 million in 2010 and cash used in financing activities of $ 292 million in 2009. the decline in 2011 is due to net transfers to our former parent , itt , as the net proceeds from the issuance of $ 1.2 billion aggregate amount of senior notes ( described below ) funded a net cash transfer to itt that included the repayment of funds used in the acquisition of ysi .
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interest expense decreased $ 219,000 , or 6.3 % , in 2014 compared to 2013. the decrease was primarily due to lower rates paid on interest-bearing liabilities as the result of reduced market rates and an improved mix of interest-bearing liabilities . the provision for loan losses totaled $ 2.4 million in 2014 , 35.3 % lower than the $ 3.7 million recorded in 2013. at december 31 , 2014 , the company 's ratio of allowance for loan losses to total loans was 0.85 % , compared to 0.98 % at december 31 , 2013. the ratio of the allowance for loan losses to total originated loans was 1.04 % at december 31 , 2014 compared to 1.12 % at december 31 , 2013. net charge-offs for 2014 were $ 1.5 million , or 0.17 % of total loans , compared to $ 2.1 million , or 0.29 % , in 2013. noninterest income increased $ 505,000 , or 6.6 % , in 2014 compared to 2013. the increase was primarily the result of higher service fees and charges ( up $ 1.0 million ) and bank card fees ( up $ 447,000 ) due to the impact of the britton & koontz acquisition and increased customer transactions , which were partially offset by lower gains on sale of securities ( down $ 426,000 ) , gains on the sale of mortgage loans ( down $ 341,000 ) , and less accretion on the fdic asset ( down $ 186,000 ) . noninterest expense increased $ 8.6 million , or 25.8 % , in 2014 compared to 2013. the increase was primarily the result of higher compensation and benefits , data processing and communications , and occupancy expenses related to the britton & koontz acquisition . the company incurred $ 2.3 million in merger-related expenses during 2014. acquisition activity on february 14 , 2014 , the company completed its acquisition of britton & koontz the former holding company of britton & koontz bank of natchez , mississippi . shareholders of britton & koontz received $ 16.14 per share is cash , yielding an aggregate purchase price of $ 34,515,000. as a result of the acquisition , five former britton & koontz branches in west mississippi were added to the bank 's branch office network , net of two former britton & koontz banking offices that were closed or consolidated in march 2014. assets acquired from britton & koontz totaled $ 298.9 million , which included loans of $ 161.6 million , investment securities of $ 98.0 million and cash of $ 15.3 million . the bank also recorded a core deposit intangible asset of $ 3.0 million and goodwill of $ 43,000 relating to the acquisition , and assumed liabilities of $ 264.5 million , which included $ 216.6 million in deposits , $ 9.3 million in fhlb advances and $ 27.3 million in securities sold under repurchase agreements . on july 15 , 2011 , the company acquired gs financial corporation ( gsfc ) , the former holding company of guaranty of metairie , louisiana . shareholders of gsfc received $ 21.00 per share in cash , yielding an aggregate purchase price of $ 26,417,000. as a result of the acquisition , the four former guaranty branches in the greater new orleans area were added to the bank 's branch office network . assets acquired from gsfc totaled $ 256.7 million , which included loans of $ 182.4 million , investment securities of $ 46.5 million and cash of $ 9.3 million . the bank also recorded a core deposit intangible asset of $ 859,000 and goodwill of $ 296,000 relating to the acquisition of gsfc , and assumed liabilities of $ 230.6 million , which included $ 193.5 million in deposits and $ 34.7 million in fhlb advances . on march 12 , 2010 , the bank acquired certain assets and liabilities of the former statewide bank , a full-service community bank formerly headquartered in covington , louisiana , from the fdic . as a result of the statewide acquisition , the bank 's branch office network was expanded to include six branches in the northshore ( of lake pontchartrain ) region of louisiana . assets acquired in the statewide transaction totaled $ 188.0 million , which included loans of $ 110.4 million , investment securities of $ 24.8 million and cash of $ 11.6 million . in addition , the bank recorded a fdic asset , representing the portion of estimated losses covered by loss sharing agreements between the bank and the fdic , of $ 34.4 million . the loss sharing agreements between the bank and the fdic afford us significant protection against future losses in the loan portfolio ( covered loans ) and repossessed assets ( collectively referred to as covered assets ) acquired in the statewide transaction . the bank also 21 recorded a core deposit intangible asset of $ 1.4 million and goodwill of $ 560,000 relating to the statewide acquisition , and assumed liabilities of $ 223.9 million , which included $ 206.9 million in deposits and $ 16.8 million in fhlb advances . critical accounting policies the accounting and financial reporting policies of the company conform to generally accepted accounting principles in the united states ( gaap ) and to general practices within the banking industry . accordingly , the financial statements require certain estimates , judgments and assumptions , which are believed to be reasonable , based upon the information available . these estimates and assumptions affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the periods presented . the following accounting policies comprise those that management believes are the most critical to aid in fully understanding and evaluating our reported financial results . story_separator_special_tag the following table summarizes the changes in the carrying amount of covered loans , net of the allowance for losses on covered loans , and accretable yield on those loans for the years ended december 31 , 2014 , 2013 , 2012 , 2011 and 2010. replace_table_token_9_th in addition to covered loans , our covered assets included $ 1.6 million , $ 3.2 million , $ 2.7 million , $ 6.1 million and $ 5.7 million , respectively , of repossessed assets at december 31 , 2014 , 2013 , 2012 , 2011 and 2010. loan quality one of management 's key objectives has been , and continues to be , maintaining a high level of asset quality . in addition to maintaining credit standards for new loan originations , we proactively monitor loans and collection and workout processes of delinquent or problem loans . when a borrower fails to make a scheduled payment , we attempt to cure the deficiency by making personal contact with the borrower . initial contacts are generally made within 10 days after the date the payment is due . in most cases , deficiencies are promptly resolved . if the delinquency continues , late charges are assessed and additional efforts are made to collect the deficiency . all loans which are designated as special mention , classified or which are delinquent 90 days or more are reported to the board of directors of the bank monthly . for loans where the collection of principal or interest payments is doubtful , the accrual of interest income ceases . it is our policy , with certain limited exceptions , to discontinue accruing interest and reverse any interest accrued on any loan which is 90 days or more past due . on occasion , this action may be taken earlier if the financial condition of the borrower raises significant concern with regard to his/her ability to service the debt in accordance with the terms of the loan agreement . interest income is not accrued on these loans until the borrower 's financial condition and payment record demonstrate an ability to service the debt . an impaired loan generally is one for which it is probable , based on current information , that the lender will not collect all the amounts due under the contractual terms of the loan . large groups of smaller balance , homogeneous loans are collectively evaluated for impairment . loans collectively evaluated for impairment include smaller balance commercial loans , residential real estate loans and consumer loans . these loans are 26 evaluated as a group because they have similar characteristics and performance experience . larger commercial real estate , multi-family residential , construction and land loans and commercial and industrial loans are individually evaluated for impairment . third party property valuations are obtained at the time of origination for real estate secured loans . when a determination is made that a loan has deteriorated to the point of becoming a problem loan , updated valuations may be ordered to help determine if there is impairment , which may lead to a recommendation for partial charge off or appropriate allowance allocation . property valuations are ordered through , and are reviewed by , an appraisal officer . the company typically orders an as is valuation for collateral property if the loan is in a criticized loan classification . the board of directors is provided with monthly reports on impaired loans . as of december 31 , 2014 and 2013 , impaired loans , loans individually evaluated for impairment , excluding acquired loans , amounted to $ 2.0 million and $ 2.6 million , respectively . as of december 31 , 2014 and 2013 , substandard loans , excluding acquired loans , amounted to $ 7.2 million and $ 13.5 million , respectively . the amount of the allowance for loan losses allocated to originated impaired or substandard loans totaled $ 140,000 and $ 482,000 as of december 31 , 2014 and 2013 , respectively . there were no assets classified as doubtful or loss as of december 31 , 2014 and 2013. federal regulations and our policies require that we utilize an internal asset classification system as a means of reporting problem and potential problem assets . we have incorporated an internal asset classification system , substantially consistent with federal banking regulations , as a part of our credit monitoring system . federal banking regulations set forth a classification scheme for problem and potential problem assets as substandard , doubtful or loss assets . an asset is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged , if any . substandard assets include those characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected . assets classified as doubtful have all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full , on the basis of currently existing facts , conditions and values , highly questionable and improbable. assets classified as loss are those considered uncollectible and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted . a savings institution 's determination as to the classification of its assets and the amount of its valuation allowances is subject to review by federal bank regulators which can order the establishment of additional general or specific loss allowances . the federal banking agencies have adopted an interagency policy statement on the allowance for loan and lease losses . the policy statement provides guidance for financial institutions on both the responsibilities of management for the assessment and establishment of allowances and guidance for banking agency examiners to use in determining the adequacy of general valuation guidelines . generally , the policy statement recommends that institutions have
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources our primary sources of funds are from deposits , amortization of loans , loan prepayments and the maturity of loans , investment securities and other investments and other funds provided from operations . while scheduled payments from the amortization of loans and investment securities and maturing investment securities are relatively predictable sources of funds , deposit flows and loan prepayments can be greatly influenced by general interest rates , economic conditions and competition . we also maintain excess funds in short-term , interest-bearing assets that provide additional liquidity . as of december 31 , 2014 , our cash and cash equivalents totaled $ 29.1 million . in addition , as of such date , our available for sale investment securities totaled $ 174.8 million . 38 we use our liquidity to fund existing and future loan commitments , to fund maturing certificates of deposit and demand deposit withdrawals , to invest in other interest-earning assets , and to meet operating expenses . as of december 31 , 2014 , we had certificates of deposit maturing within the next 12 months totaling $ 151.4 million . based upon historical experience , we anticipate that the majority of the maturing certificates of deposit will be redeposited with us in certificates of deposit or other deposit accounts . in addition to cash flows from loan and securities payments and prepayments as well as from sales of available for sale securities , we have significant borrowing capacity available to fund liquidity needs . in recent years , we have utilized borrowings as a cost efficient addition to deposits as a source of funds . our borrowings consist of advances from the fhlb , of which we are a member . under terms of the collateral agreement with the fhlb , we may pledge residential mortgage loans and mortgage-backed securities as well as our stock in the fhlb as collateral for such advances . for the year ended december 31 , 2014 , the average balance of our outstanding fhlb advances was $ 94.5 million .
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under the consignment programs , only the fees associated with vehicle processing are recorded in revenue , not the actual 31 sales price ( gross proceeds ) . sales transaction fees also include fees charged to vehicle buyers for purchasing vehicles , storage , loading and annual registration . transportation revenue includes charges to sellers for towing vehicles under certain contracts . transportation revenue also includes towing charges assessed to buyers for delivering vehicles . purchased vehicle revenue includes the gross sales price of the vehicle which we have purchased or are otherwise considered to own and is primarily generated in the u.k. operating costs consist primarily of operating personnel ( which includes yard management , clerical and yard employees ) , rent , contract vehicle towing , insurance , fuel , equipment maintenance and repair , and costs of vehicles we sold under purchase contracts . costs associated with general and administrative expenses consist primarily of executive management , accounting , data processing , sales personnel , human resources , professional fees , research and development and marketing expenses . during fiscal 2004 and fiscal 2008 , we converted all of our north american and u.k. sales , respectively , to an internet-based auction-style model using our vb 2 internet sales technology which employs a two-step bidding process . the first step , called the preliminary bid , allows members to submit bids up to one hour before a real time virtual auction begins . the second step allows members to bid against each other , and the high bidder from the preliminary bidding process , in a real-time process over the internet . acquisitions and new operations we have experienced significant growth in facilities as we have acquired nine facilities and established three new facilities since the beginning of fiscal 2010 through july 31 , 2012. all of these acquisitions have been accounted for using the purchase method of accounting . as part of our overall expansion strategy of offering integrated services to vehicle sellers , we anticipate acquiring and developing facilities in new regions , as well as the regions currently served by our facilities . we believe that these acquisitions and openings strengthen our coverage as we have 155 facilities located in north america and the u.k. as of july 31 , 2012 and are able to provide national coverage for our sellers . the following table sets forth facilities that we have acquired or opened from august 1 , 2009 through july 31 , 2012 : replace_table_token_9_th * closed in fiscal 2010 in january 2010 , the company completed the acquisition of d hales limited ( d hales ) which operated five locations in the united kingdom . in fiscal 2011 , we acquired john hewitt and sons , limited ( hewitt ) which operated one location in the united kingdom . these acquisitions were undertaken because of their strategic fit with our business in the united kingdom . in august 2012 , we acquired ride safely middle east auction , llc located in dubai , uae . 32 the period-to-period comparability of our consolidated operating results and financial condition is affected by business acquisitions , new openings , weather and product introductions during such periods . in particular , we have certain contracts inherited through our u.k. acquisitions that require us to act as a principal , purchasing vehicles from the insurance companies and reselling them for our own account . it is our intention , where possible , to migrate these contracts to the agency model in future periods . changes in the amount of revenue derived in a period from principal transactions relative to total revenue will impact revenue growth and margin percentages . in addition to growth through acquisitions , we seek to increase revenues and profitability by , among other things , ( i ) acquiring and developing additional vehicle storage facilities in key markets , ( ii ) pursuing national and regional vehicle seller agreements , ( iii ) expanding our service offerings to sellers and members , and ( iv ) expanding the application of vb 2 into new markets . in addition , we implement our pricing structure and auction procedures and attempt to introduce cost efficiencies at each of our acquired facilities by implementing our operational procedures , integrating our management information systems and redeploying personnel , when necessary . results of operations fiscal 2012 compared to fiscal 2011 revenues the following table sets forth information on revenue by class ( in thousands , except percentages ) : replace_table_token_10_th service revenues . service revenues were $ 757.3 million during fiscal 2012 compared to $ 713.1 million for fiscal 2011 , an increase of $ 44.2 million , or 6.2 % , above fiscal 2011. growth in unit volume generated $ 33.5 million in additional service revenue relative to last year and was driven primarily by growth in the number of units sold on behalf of franchise and independent car dealerships , new and expanded contracts with insurance companies and the migration from the principal model to the agency model in the u.k. growth in the average revenue per car sold generated $ 11.5 million in additional revenue over last year and was driven by an increase in the average vehicle auction selling price as over 50 % of our service revenue is tied in some manner to the ultimate selling price of the vehicle . story_separator_special_tag the dilutive earnings per share impact of all repurchased shares on the weighted average number of common shares outstanding for the year ended july 31 , 2012 is $ 0.04. in the first quarter of fiscal year 2010 , mr. jay adair , chief executive officer ( and then president ) , exercised stock options through cashless exercises . in the fourth quarter of fiscal year 2010 , mr. willis j. johnson , chairman of the board , exercised stock options through a cashless exercise . in the second , third and fourth quarters of fiscal year 2011 certain executive officers exercised stock options through cashless exercises . in the first , second and third quarters of fiscal year 2012 certain executive officers exercised stock options through cashless exercises . a portion of the options exercised were net settled in satisfaction of the exercise price and federal and state minimum statutory tax withholding requirements . we remitted $ 2.6 million , $ 4.2 million and $ 7.4 million , in fiscal 2012 , 2011 and 2010 , respectively , to the proper taxing 38 authorities in satisfaction of the employees ' minimum statutory withholding requirements . the exercises are summarized in the following table : replace_table_token_12_th ( 1 ) shares withheld for taxes are treated as a repurchase of shares for accounting purposes but do not count against our stock repurchase program . contractual obligations we lease certain domestic and foreign facilities , and certain equipment under non-cancelable operating leases . in addition to the minimum future lease commitments presented , the leases generally require the company to pay property taxes , insurance , maintenance and repair costs which are not included in the table because we have determined these items are not material . the following table summarizes our significant contractual obligations and commercial commitments as of july 31 , 2012 ( in thousands ) : replace_table_token_13_th amount of commitment expiration per period commercial commitments ( 3 ) total less than 1 year 13 years 35 years more than 5 years other letters of credit $ 6,659 $ 6,659 $ $ $ $ ( 1 ) contractual obligations consist of future non-cancelable minimum lease payments under capital and operating leases , used in the normal course of business . ( 2 ) tax liabilities include the long-term liabilities in the consolidated balance sheet for unrecognized tax positions . at this time we are unable to make a reasonably reliable estimate of the timing of payments in individual years beyond 12 months due to uncertainties in the timing of tax audit outcomes . ( 3 ) commercial commitments consist primarily of letters of credit provided for insurance programs and certain business transactions . 39 credit facilities on december 14 , 2010 , we entered into an amended and restated credit facility agreement ( credit facility ) , which supersedes our previously disclosed credit agreement with bank of america , n.a . ( bank of america ) . the credit facility is an unsecured credit agreement providing for ( i ) a $ 100.0 million revolving credit facility , including a $ 100.0 million alternative currency borrowing sublimit and a $ 50.0 million letter of credit sublimit ( revolving credit ) and ( ii ) a term loan facility of $ 400.0 million ( term loan ) . on january 14 , 2011 the full $ 400.0 million provided under the term loan was borrowed . on september , 29 , 2011 , we amended the credit agreement increasing the amount of the term loan facility from $ 400.0 million to $ 500.0 million . the term loan , which at july 31 , 2012 had $ 443.8 million outstanding , amortizes $ 18.8 million each quarter beginning december 31 , 2011 with all outstanding borrowings due on december 14 , 2015. all amounts borrowed under the term loan may be prepaid without premium or penalty . during the year ended july 31 , 2012 , we made principal repayments of $ 56.3 million . we currently have $ 1.6 million deferred financing costs in other assets as of july 31 , 2012. amounts borrowed under the credit facility bear interest , subject to certain restrictions , at a fluctuating rate based on ( i ) the eurocurrency rate ; ( ii ) the federal funds rate ; or ( iii ) the prime rate as described in the credit facility . we have entered into two interest rate swaps ( which is further described in the notes to consolidated financial statements note 10. derivatives and hedging ) to exchange our variable interest rate payments commitment for fixed interest rate payments on the term loan balance , which at july 31 , 2012 , totaled $ 443.8 million . a default interest rate applies on all obligations during an event of default under the credit facility , at a rate per annum equal to 2.0 % above the otherwise applicable interest rate . at july 31 , 2012 , our interest rate is the 0.25 % eurocurrency rate plus the 1.50 % applicable rate . the applicable rate can fluctuate between 1.5 % and 2.0 % depending on our consolidated net leverage ratio ( as defined in the credit facility ) . the credit facility is guaranteed by our material domestic subsidiaries . the carrying amount of the credit facility is comprised of borrowing under which the interest accrued under a fluctuating interest rate structure . accordingly , the carrying value approximates fair value at july 31 , 2012. amounts borrowed under the revolving credit may be repaid and reborrowed until the maturity date , which is december 14 , 2015. the credit facility requires us to pay a commitment fee on the unused portion of the revolving credit . the commitment fee ranges from 0.075 % to 0.125 % per annum depending on our leverage ratio . we had no outstanding borrowings under the revolving
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources our primary source of working capital is cash generated though operations . potential internal sources of additional working capital are the sale of assets or the issuance of equity through option exercises and shares issued under our employee stock purchase plan . a potential external source of additional working capital is the issuance of debt and equity . however , with respect to the issuance of equity or debt , we can not predict if these sources will be available in the future and , if available , if they can be issued under terms commercially acceptable to us . historically , we have financed our growth through cash generated from operations , public offerings of common stock , the equity issued in conjunction with certain acquisitions and debt financing . our primary source of cash generated by operations is from the collection of sellers ' fees , members ' fees and reimbursable 36 advances from the proceeds of auctioned salvage vehicles . our business is seasonal as inclement weather during the winter months increases the frequency of accidents and , consequently , the number of cars totaled by the insurance companies . during the winter months , most of our facilities process 10 % to 30 % more vehicles than at other times of the year . this increased volume requires the increased use of our cash to pay out advances and handling costs of the additional business . our primary source of working capital is net income . accordingly , factors affecting net income are the principal factors affecting the generation of working capital .
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our deferred revenue at the end of 2020 was $ 41.5 million , compared with $ 43.3 million at the end of 2019. we generated cash flows from operations of $ 31.3 million during fiscal 2020. our cash and cash equivalents were $ 21.4 million at the end of 2020 , compared with $ 13.3 million at the end of 2019. our services are sold on a subscription basis with contract terms historically ranging from one to five years billed annually . we are increasingly moving toward a monthly billing model . this shift has been largely driven by our recent acquisition activity . we recognize revenue ratably on a monthly basis over the term of the subscription once service commences . 29 we attempt to grow our business by signing new customers to subscription services and or selling new or higher volume services to existing customers ( i.e . , “ upsell ” ) while retaining existing customers through renewal of their subscriptions for successive periods . our backlog consists of the total order value of contracted business that has not yet been recognized into revenue . backlog is calculated by adding to the existing contracted order value the total value of all orders booked in the period ( e.g . , quarterly ) less the value of revenue recognized for that period . although orders historically have been non-cancellable , occasionally we adjust backlog for customer bankruptcy or change of term , but these instances are rare and do not materially impact the backlog amount . the backlog will grow if the value of total orders added in a period exceeds the value of revenue recognized in that period . conversely , the backlog amount will decline if revenue recognized exceeds the total order value added for the period . a decline in backlog may result from fluctuations in total orders caused by timing of renewal orders or by the shortening of the average term of our contracts from a multi-year to an annual commitment or to a monthly billing and subscription model . as of december 31 , 2020 , our net dollar customer retention percentage was 100 % . we calculate this percentage by first identifying our current period renewal and upsell orders secured from existing customers and then combining these totals with billings for the period . we then compare this amount to the total orders that were due to renew and were then combined with scheduled billings . increasing retention is a key driver for the company to increase overall revenue and annual recurring revenue . deferred revenue is the value of contracted business that has been paid but has not been recognized as revenue . see description of the components of the backlog following in “ results of operations - backlog ” in this “ item 7 , management 's discussion and analysis of financial condition and results of operations . ” as of december 31 , 2020 , our annual recurring revenue ( arr ) was $ 237.7 million . we calculate arr by determining the annual or monthly revenue of subscription agreements that are active as of the end of the applicable period and multiplying by 1 or 12 depending on the term of such agreements . we monitor this metric to aid in determining to what extent individual customer relationships , considered in the aggregate , are growing or declining in financial magnitude . our operations and future prospects are further discussed throughout this “ item 7. management 's discussion and analysis of financial condition and results of operations . ” there are no assurances we will be successful in our efforts to achieve continued growth . our continued growth depends on the timely development and market acceptance of our products and services . see “ item 1a . risk factors ” for more information on the risks relative to our operations and future prospects . critical accounting policies and estimates in preparing our consolidated financial statements , we make estimates , assumptions and judgments that can have a significant impact on revenue , income from operations and net income , as well as the value of certain assets and liabilities on our consolidated balance sheet . the application of our critical accounting policies requires an evaluation of a number of complex criteria and significant accounting judgements by us . management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances ( including but not limited to the potential impacts arising from the recent covid-19 pandemic and public and private sector policies and initiatives aimed at reducing its transmission ) , the results of which form the basis for making judgements about the carrying values of assets and liabilities . we evaluate our estimates on a regular basis and make changes accordingly . senior management has discussed the development , selection and disclosure of these estimates with the audit committee of our board of directors . actual results may materially differ from these estimates under different assumptions or conditions . if actual results were to materially differ from these estimates , the resulting changes could have a material adverse effect on our consolidated financial statements . we consider accounting policies to be critical when they require us to make assumptions about matters that are highly uncertain at the time the accounting estimate is made and when different estimates that our management reasonably has used have a material effect on the presentation of our financial condition , changes in financial condition or results of operations . management believes the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated financial statements . story_separator_special_tag net income ( loss ) for 2020 was $ ( 6.4 ) million in 2020 compared with $ ( 14.6 ) million in 2019 and $ 15.4 million in 2018. the year-over-year improvement in our net loss was primarily due to revenue growth and the completion of prior year acquisition and integration related costs associated with our appriver purchase , as well as cost reductions in response to the covid-19 pandemic . our 2019 net loss is attributed to significant transaction and integration-related costs incurred to acquire appriver and deliveryslip in 2019 , amortization of intangible assets recognized from the same acquisitions as well as higher operating expenses and interest expense . our 2018 net income includes a $ 7.8 million tax benefit resulting from a decrease to our deferred tax asset valuation allowance based on our expected future profitability and ability to use net operating losses . net income ( loss ) attributable to common shareholders for 2020 was $ ( 15.5 ) million compared with $ ( 24.6 ) million in 2019 and $ 15.4 million in 2018. our 2020 and 2019 net loss attributable to common shareholders includes deemed and accrued dividends of $ 9.0 million , and $ 9.9 million , respectively , to preferred shareholders . net income ( loss ) per diluted share was $ ( 0.29 ) for 2020 compared to $ ( 0.46 ) for 2019 and $ 0.29 for 2018. unrestricted cash was $ 21.4 million on december 31 , 2020 . 34 results of operations revenue the following table sets forth a year-over-year comparison of our total revenues : replace_table_token_3_th the $ 45.1 million , or 26 % , increase in revenue in 2020 over 2019 was related in part to recognition of twelve full months in sales for the year ended december 31 , 2020 , attributable to our appriver business acquired in february 2019. the $ 103.0 million or 146 % increase in revenue in 2019 over 2018 was primarily related to our appriver acquisition in february 2019 , which contributed $ 97.8 million for the year-end december 31 , 2019. we additionally grew our revenue for these periods with continued success in our subscription-based business model with both steady additions to the subscriber base and with a high rate of existing customer renewals and the realization of previously contracted revenue in our backlog . in the year ended december 31 , 2020 , excluding our cloudally sales , we categorized our revenue in the following core industry verticals : 21 % healthcare , 17 % financial services , 3 % government sector and 59 % as other . in the year ended december 31 , 2019 , we categorized our revenue in the following core industry verticals : 23 % healthcare , 19 % financial services , 4 % government sector and 54 % as other . additionally , sales continued from a wide base of distributors . approximately 76 % and 74 % of our new business transacted in the year ended december 31 , 2020 and 2019 , respectively , resulted from our partner relationships . while we have continued to add new bundled price offerings to our product portfolio , our list pricing has remained generally consistent during the periods shown above . however , there are no assurances that potential increased competition in this market or other factors , including inflation , will not result in future price erosion . price erosion , should it occur , could have a dampening effect on order growth and the revenue derived from our new orders . revenue outlook : we expect continued growth in our existing offering and in our new products , along with increased sales from our partner channels to increase our business in 2021 and increase our year-over-year revenue . annual recurring revenue we measure the health of our subscriber base by the growth of our annual recurring revenue ( “ arr ” ) , which is defined as the aggregate annualized contract value attributable to recurring revenue contracts as of the end of the applicable reporting period . we calculate arr by determining the annual or monthly revenue of subscription agreements that are active as of the end of the applicable period and multiplying by 1 or 12 , depending on the term of such agreements . arr aids us in determining to what extent individual customer relationships , considered in the aggregate , are growing or declining in financial magnitude . arr is summarized in the table below : replace_table_token_4_th backlog our backlog was $ 83.4 million at december 31 , 2020 , compared to $ 89.4 million at december 31 , 2019. the backlog is comprised of contractual commitments that we expect to amortize into revenue . as of december 31 , 2020 , the backlog was comprised of the following elements : $ 41.5 million of deferred revenue that has been billed and paid , $ 12.9 million billed but unpaid , and approximately $ 29.0 million of unbilled contracts . the decline in backlog resulted from the shortening of the average term of our contracts from a multi-year to an annual commitment or to a monthly billing and subscription model . the backlog is recognized into revenue ratably as the services are performed . approximately 75 % of the total backlog is expected to be recognized as revenue during the next twelve months . 35 cost of revenue the following table sets forth a year-over-year comparison of the cost of revenue . replace_table_token_5_th cost of revenues is comprised of microsoft fees mostly associated with the resale of microsoft office365 and hosted exchange products , costs related to operating and maintaining the zixdata center , third party data center costs , a field deployment team , customer service and support , and depreciation expense of computer equipment and amortization of acquired technology . the $ 35.9 million increase in 2020 compared to 2019 reflected in the table above
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources overview based on our 2020 financial results and current expectations , including our assessment of the covid-19 pandemic potential impact on our company , we believe our cash and cash equivalents , cash generated from operations , and availability under our $ 25 million revolving facility ( which , as of december 31 , 2020 , was repaid in full and the entire undrawn balance of $ 25 million was available to fund working capital and for other general corporate purposes , including the financing of permitted acquisitions , investments and restricted payments , subject to the conditions contained in the credit agreement ) will satisfy our working capital needs , capital expenditures , investment requirements , contractual obligations , commitments , and other liquidity requirements associated with our operations through at least the next twelve months . we plan for and measure our liquidity and capital resources through an annual budgeting process and quarterly reviews , and we will continue to monitor our position to protect our company against uncertainties related to the covid-19 crisis . during 2020 , our cash flow from operations was $ 31.3 million , an increase of $ 17.3 million from the $ 14.0 million cash flow from operations during 2019. at december 31 , 2020 , our cash and cash equivalents totaled $ 21.4 million , an increase of $ 8.1 million from the december 31 , 2019 balance . the $ 8.1 million increase in our cash position is primarily attributable to our improved cash flow from operating activities in 2020 including management actions to reduce spending in response to the covid-19 crisis , as well as from increased spending in the prior year associated with due diligence , banking and other fees associated with our appriver acquisition in february 2019. for the year ended december 31 , 2020 , we achieved 26 % growth in revenue , 48 % gross margin and strong cash collections which increased our cash on hand level after investing back for business integration .
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the triple bottom line balances the interests of the companies ' employees , customers , suppliers , regulators , creditors , michigan 's residents , the investment community , and other stakeholders , and it reflects the broader societal impacts of the companies ' activities . consumers ' sustainability report , which is available to the public , describes the company 's progress toward world class performance measured in the areas of people , planet , and profit . people : the people element of the triple bottom line represents cms energy 's and consumers ' commitment to their employees , their customers , the residents of local communities in which the companies do business , and other stakeholders . the safety of employees , customers , and the general public is a priority of cms energy and consumers . accordingly , cms energy and consumers have worked to integrate a set of safety principles into their business operations and culture . these principles include complying with applicable safety , health , and security regulations and implementing programs and processes aimed at continually improving safety and security conditions . over the last ten years , consumers ' osha recordable incident rate has decreased by over 53 percent . in response to the covid-19 pandemic , cms energy and consumers have issued a response plan that is focused on the health , safety , and well-being of their co-workers , customers , and communities . cms energy and consumers have aligned with safety and health guidelines from the cdc , osha , and the michigan department of health and human services in order to protect their employees , customers , 53 and contractors to ensure the continued delivery of critical energy services . to align with , and in addition to , these guidelines , cms energy and consumers have : secured the supply chain necessary to provide front-line workers with appropriate personal protective equipment and cleaning supplies worked with local health departments and hospital systems to begin administering vaccinations to essential front-line employees when necessary , sequestered employees with critical roles at generating plants , gas compression facilities , and electric control rooms implemented a paid self-quarantine requirement for employees who are exhibiting symptoms of covid-19 or who have come into contact with a person suspected to have covid-19 prohibited business-related international travel and instituted a mandatory ten-day work remote period for employees who return from personal travel to heavily impacted areas required employees to work remotely when possible when necessary , reduced service at 13 direct payment offices to drop box and drive-through services only initially adjusted work to focus on emergent and critical activities such as electric outages , gas leaks , and other public safety and reliability work ; as work restrictions have gradually lifted in michigan , the companies have resumed normal work with safety measures in place contracted a chief medical officer to guide the companies ' response and provide rapid support and supplies for the workforce limited access to company facilities , enhanced cleaning protocols , and established a mask-wearing policy offered additional paid leave to employees to alleviate child care-related burdens and implemented other interim workforce policies to offer flexibility and reduce employee concerns in response to the pandemic , cms energy and consumers initially suspended shut-offs of service for non-payment and extended payment protection plans for low-income and senior customers . cms energy and consumers slowly began resuming shut-offs of service for non-payment in late july 2020 for commercial and industrial customers and in october 2020 for residential customers . cms energy and consumers remain committed to assisting customers impacted by the pandemic . during 2020 , consumers provided $ 12 million to help michigan residents and small businesses who had experienced difficulty paying their energy bill due to the pandemic . additionally , in december 2020 , consumers donated another $ 3 million to agencies that provide energy bill assistance to low-income households . cms energy and consumers also place a high priority on customer value and on providing a hometown customer experience . consumers ' customer-driven investment program is aimed at improving safety and increasing electric and gas reliability , which has resulted in measurable improvements in customer satisfaction . central to consumers ' commitment to its customers are the initiatives it has undertaken to keep electricity and natural gas affordable , including : replacement of coal-fueled generation and ppas with a cost-efficient mix of renewable energy and energy waste reduction and demand response programs targeted infrastructure investment to reduce maintenance costs and improve reliability and safety supply chain optimization information and control system efficiencies employee and retiree health care cost sharing workforce productivity enhancements 54 in addition , consumers ' gas commodity costs declined by 66 percent from 2010 through 2020 , due not only to a decrease in market prices but also to consumers ' improvements to its gas infrastructure and optimization of its gas purchasing and storage strategy . these gas commodity savings are passed on to customers . planet : the planet element of the triple bottom line represents cms energy 's and consumers ' commitment to protect the environment . this commitment extends beyond compliance with various state and federal environmental , health , and safety laws and regulations . management considers climate change and other environmental risks in the companies ' strategy development , business planning , and enterprise risk management processes . cms energy and consumers continue to focus on opportunities to protect the environment and to reduce their carbon footprint . story_separator_special_tag enterprises results of operations presented in the following table are the detailed after-tax changes to the enterprises segment 's net income available to common stockholders for 2020 versus 2019 : replace_table_token_12_th 1 see note 14 , income taxes . for detailed after-tax changes to the enterprises segment 's net income available to common stockholders for 2019 versus 2018 , see item 7. management 's discussion and analysis of financial condition and results of operations—results of operations—enterprises results of operations , in the form 10‑k for the fiscal year ended december 31 , 2019 , filed february 6 , 2020 . enerbank results of operations presented in the following table are the detailed after-tax changes to enerbank 's net income available to common stockholders for 2020 versus 2019 : replace_table_token_13_th 1 see note 2 , new accounting standards . for detailed after-tax changes to enerbank 's net income available to common stockholders for 2019 versus 2018 , see item 7. management 's discussion and analysis of financial condition and results of operations—results of operations—enerbank results of operations , in the form 10‑k for the fiscal year ended december 31 , 2019 , filed february 6 , 2020 . 67 corporate interest and other results of operations presented in the following table are the detailed after-tax changes to corporate interest and other results for 2020 versus 2019 : replace_table_token_14_th 1 see note 14 , income taxes . for detailed after-tax changes to corporate interest and other 's net income available to common stockholders for 2019 versus 2018 , see item 7. management 's discussion and analysis of financial condition and results of operations—results of operations—corporate interest and other results of operations , in the form 10‑k for the fiscal year ended december 31 , 2019 , filed february 6 , 2020 . 68 cash position , investing , and financing at december 31 , 2020 , cms energy had $ 185 million of consolidated cash and cash equivalents , which included $ 17 million of restricted cash and cash equivalents . at december 31 , 2020 , consumers had $ 35 million of consolidated cash and cash equivalents , which included $ 15 million of restricted cash and cash equivalents . operating activities presented in the following table are specific components of net cash provided by operating activities for 2020 versus 2019 : in millions cms energy , including consumers year ended december 31 , 2019 $ 1,790 reasons for the change higher net income 70 non‑cash transactions 1 135 higher contributions to postretirement benefit plans , primarily to pension plans ( 702 ) favorable impact of changes in core working capital , 2 due primarily to extended payment terms for vendors in 2020 and higher vendor payments in 2019 , offset partially by lower customer receipts due to lower electric and gas deliveries 50 unfavorable impact of changes in other assets and liabilities , due primarily to higher property tax payments , a payment to settle litigation , and higher energy waste reduction spending in excess of collections , offset partially by the absence of 2019 refunds to customers related to the tcja and self-implemented electric rates ( 67 ) year ended december 31 , 2020 $ 1,276 consumers year ended december 31 , 2019 $ 1,601 reasons for the change higher net income 73 non‑cash transactions 1 194 higher contributions to postretirement benefit plans , primarily to pension plans ( 683 ) favorable impact of changes in core working capital , 2 due primarily to extended payment terms for vendors in 2020 and higher vendor payments in 2019 , offset partially by lower customer receipts due to lower electric and gas deliveries 40 unfavorable impact of changes in other assets and liabilities , due primarily to higher property tax payments and higher energy waste reduction spending in excess of collections , offset partially by lower income taxes payments to cms energy and the absence of 2019 refunds to customers related to the tcja and self-implemented electric rates ( 7 ) year ended december 31 , 2020 $ 1,218 1 non ‑ cash transactions comprise depreciation and amortization , changes in deferred income taxes and investment tax credits , bad debt expense , and other non‑cash operating activities and reconciling adjustments . 2 core working capital comprises accounts receivable , notes receivable , accrued revenue , inventories , accounts payable , and accrued rate refunds . 69 for specific components of net cash provided by operating activities for 2019 versus 2018 , see item 7. management 's discussion and analysis of financial condition and results of operations—cash position , investing , and financing—operating activities , in the form 10‑k for the fiscal year ended december 31 , 2019 , filed february 6 , 2020 . investing activities presented in the following table are specific components of net cash used in investing activities for 2020 versus 2019 : replace_table_token_15_th 1 see note 22 , asset sale and exit activities for specific components of net cash used in investing activities for 2019 versus 2018 , see item 7. management 's discussion and analysis of financial condition and results of operations—cash position , investing , and financing—investing activities , in the form 10‑k for the fiscal year ended december 31 , 2019 , filed february 6 , 2020 . 70 financing activities presented in the following table are specific components of net cash provided by financing activities for 2020 versus 2019 : in millions cms energy , including consumers year ended december 31 , 2019 $ 1,008 reasons for the change higher debt issuances 1,028 higher debt retirements ( 725 ) lower borrowings of certificates of deposit at enerbank ( 215 ) higher repayments under consumers ' commercial paper program ( 83 ) higher issuances of common stock , primarily the settlement of equity forward sale contracts 241 higher payments of dividends on common stock ( 31 ) higher debt prepayment costs ( 51 ) proceeds from the sale of membership interest in vie
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | debt to capital 1 < 0.70 to 1.0 0.58 to 1.0 consumers debt to capital 2 < 0.65 to 1.0 0.49 to 1.0 1 applies to cms energy 's revolving credit agreement and term loan credit agreement . in april 2020 , amendments to these agreements changed the required financial covenant from a leverage ratio to a capitalization ratio . 2 applies to consumers ' revolving credit agreements and letter of credit agreement . components of cms energy 's and consumers ' cash management plan include controlling operating expenses and capital expenditures and evaluating market conditions for financing and refinancing opportunities . cms energy 's and consumers ' present level of cash and expected cash flows from operating activities , together with access to sources of liquidity , are anticipated to be sufficient to fund the companies ' contractual obligations for 2021 and beyond . cms energy is also required both by law and by contract to provide financial support , including infusing additional capital , to ensure that enerbank satisfies mandated capital requirements and has sufficient liquidity to operate . with its self-funding plan , enerbank has exceeded these requirements historically and exceeded them as of december 31 , 2020. in addition , enerbank has access to contingent funding sources , including the discount window and a $ 50 million uncommitted federal funds line of credit . each month , enerbank pledges a subset of its eligible loans to the federal reserve to ensure a seamless 73 borrowing capability should the need arise . at december 31 , 2020 , there were no outstanding borrowings under enerbank 's contingent funding sources . contractual obligations : presented in the following table are cms energy 's and consumers ' contractual obligations . the table excludes all amounts classified as current liabilities on cms energy 's and consumers ' consolidated balance sheets , other than the current portion of long-term debt , leases , and other financing . replace_table_token_16_th 1 long-term contracts for the purchase of commodities and related services , and construction and service agreements . the commodities and related services include natural gas and coal and associated transportation . 2 long-term ppas from certain affiliates of cms enterprises .
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human data to date have shown a favorable safety profile of our syncon ® immunotherapies delivered using cellectra ® in over 6,000 administrations across almost 2,000 patients . we or our collaborators are currently conducting or planning clinical studies of our proprietary syncon ® immunotherapies for hpv-caused pre-cancers , including cervical , vulvar , and anal dysplasia ; hpv-caused cancers , including head & neck , cervical , anal , penile , vulvar , and vaginal ; bladder cancer ; glioblastoma multiforme , or gbm ; hepatitis b virus ; hepatitis c virus ; hiv ; ebola ; middle east respiratory syndrome , or mers ; lassa fever ; and zika virus . our corporate strategy is to advance , protect and exploit our differentiated immunotherapy platform . through the use of our unique capabilities on both design and development , we continue to progress and validate an array of cancer and infectious disease immunotherapy and vaccine products . we aim to advance products through to commercialization and continue to leverage third-party resources through collaborations and partnerships , including product license agreements . our partners and collaborators include astrazeneca , regeneron pharmaceuticals , inc. , f. hoffmann-la roche ag/genentech , inc. , apollobio 60 corporation , the bill and melinda gates foundation , the wistar institute , the university of pennsylvania , the parker institute for cancer immunotherapy , coalition for epidemic preparedness innovations ( cepi ) , defense advanced research projects agency ( darpa ) , geneone life science , inc. , plumbline life sciences , inc. , national institutes of health ( nih ) , hiv vaccines trial network ( hvtn ) , national cancer institute ( nci ) , united states military hiv research program , drexel university , and laval university . all of our product candidates are in the research and development phase . we have not generated any revenues from the sale of any products , and we do not expect to generate any such revenues for at least the next several years . we earn revenue from license fees and milestone revenue and collaborative research and development agreements . our product candidates will require significant additional research and development efforts , including extensive preclinical and clinical testing . all product candidates that we advance to clinical testing will require regulatory approval prior to commercial use , and will require significant costs for commercialization . we may not be successful in our research and development efforts , and we may never generate sufficient product revenue to be profitable . as of december 31 , 2018 , we had an accumulated deficit of $ 620.4 million . we expect to continue to incur substantial operating losses in the future due to our commitment to our research and development programs , the funding of preclinical studies , clinical trials and regulatory activities and the costs of general and administrative activities . critical accounting policies the sec defines critical accounting policies as those that are , in management 's view , important to the portrayal of our financial condition and results of operations and require management 's judgment . our discussion and analysis of our financial condition and results of operations are based on our audited consolidated financial statements , which have been prepared in accordance with u.s. gaap . the preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities , revenue and expenses . we base our estimates on experience and on various assumptions that we believe are reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results may differ from those estimates . our critical accounting policies include : revenue recognition effective january 1 , 2018 , we adopted accounting standards update ( “ asu ” ) 2014-09 , revenue from contracts with customers ( “ topic 606 ” ) using the modified retrospective method which consisted of applying and recognizing the cumulative effect of topic 606 at the date of initial application . topic 606 supersedes the revenue recognition requirements in accounting standards codification ( “ asc ” ) topic 605 , revenue recognition ( “ topic 605 ” ) , including most industry-specific revenue recognition guidance throughout the industry topics of the asc . all periods prior to the adoption date of topic 606 have not been restated to reflect the impact of the adoption of topic 606 , but continue to be accounted for and presented under topic 605. the following paragraphs in this section describe our revenue recognition accounting policies under topic 606 upon adoption on january 1 , 2018. refer to note 2 to the consolidated financial statements included in our annual report on form 10-k for the year ended december 31 , 2017 for revenue recognition accounting policies under topic 605. we recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services . to determine revenue recognition for contracts with customers , we perform the following five steps : ( i ) identify the contract ( s ) with a customer ; ( ii ) identify the performance obligations in the contract ; ( iii ) determine the transaction price ; ( iv ) allocate the transaction price to the performance obligations in the contract ; and ( v ) recognize revenue when ( or as ) we satisfy our performance obligations . at contract inception , we assess the goods or services agreed upon within each contract and assess whether each good or service is distinct and determine those that are performance obligations . story_separator_special_tag total stock-based compensation for options granted to non-employees for the years ended december 31 , 2018 and 2017 was $ 302,000 and $ 201,000 , respectively . gain on sale of assets the gain on sale of assets for the year ended december 31 , 2017 related to the sale of our compound vgx-1027 to geneone for a purchase price of $ 1.0 million . these assets had a carrying value of zero , resulting in the full proceeds being recognized as a gain on sale . interest and other income , net interest and other income , net , decreased by $ 692,000 for the year ended december 31 , 2018 as compared to 2017 primarily due to an increase in net realized loss recorded on short-term investments , partially offset by higher interest earned on short-term investments during the year . change in fair value of common stock warrants the change in fair value of common stock warrants for the years ended december 31 , 2018 and 2017 was $ 361,000 and $ 807,000 , respectively . the variance is due to the revaluation of the warrants to their fair value at each balance sheet date ; in addition , the warrants were exercised during the quarter ended september 30 , 2018 , eliminating the associated warrant liability . loss on investment in affiliated entity the loss on investment in affiliated entity for the years ended december 31 , 2018 and 2017 was $ 2.0 million and $ 7.0 million , respectively , resulting from the change in the fair market value of the investments in geneone and plumbline life sciences , or pls . after the adoption of asu no . 2016-01 on january 1 , 2018 , unrealized gains and losses on pls are recorded on the consolidated statement of operations as a gain ( loss ) on investment in affiliated entity rather than the consolidated statement of comprehensive income ( loss ) . provision for income taxes the provision for income taxes of $ 2.2 million for the year ended december 31 , 2018 was related to foreign income taxes on the upfront payment received from apollobio in march 2018. income taxes 65 since inception , we have incurred operating losses and accordingly have not recorded a provision for income taxes for any of the periods presented . utilization of net operating losses and tax credits are subject to a substantial annual limitation due to ownership change limitations provided by the internal revenue code of 1986 , as amended , or irc . as of december 31 , 2018 , we had net operating loss carry forwards for u.s. federal , california and pennsylvania income tax purposes of approximately $ 383.3 million , $ 68.6 million and $ 75.6 million , respectively , net of the net operating losses that will expire due to irc section 382 limitations . we also had u.s. federal and state research and development tax credits of approximately $ 13.8 million and $ 2.7 million , respectively , net of the federal research and development credits that will expire due to irc section 383 limitations . if not utilized , the net operating losses and credits will begin to expire in 2019 . comparison of years ended december 31 , 2017 and 2016 revenue revenue primarily consisted of revenue under collaborative research and development arrangements and grants and government contracts for the years ended december 31 , 2017 and 2016. our year over year total revenue increased $ 6.9 million , or 19 % . the $ 21.3 million increase in revenue under collaborative research and development arrangements for the year ended december 31 , 2017 as compared to 2016 was primarily due to an increase in revenue recognized from astrazeneca , as the up-front payment received in september 2015 and other deferred amounts totaling $ 13.8 million were recognized in june 2017 upon astrazeneca 's selection of the first cancer research collaboration product candidate , as well as a $ 7.0 milestone payment recognized in december 2017 for the initiation of the phase 2 portion on an ongoing clinical trial . the increase was also due to an increase in revenue recognized from roche of $ 1.2 million , as all remaining revenue was recognized upon termination of that collaboration agreement in 2017. the $ 14.4 million decrease in grants and miscellaneous revenue for the year ended december 31 , 2017 as compared to 2016 was primarily due to a decrease in revenue recognized from our nearly completed darpa ebola grant and completed darpa sub-contract for the treatment of infectious diseases of $ 12.6 million and $ 4.1 million , respectively , partially offset by an increase in revenue recognized from our two sub-contracts with wistar totaling $ 2.2 million . beginning in 2018 , contributions received from grant agreements are recorded as a contra-expense as opposed to revenue on the consolidated statement of operations . for additional information on the new accounting standard for revenues from contracts with customers please read note 2 , summary of significant accounting policies : recent accounting pronouncements , to the consolidated financial statements included in this report for further discussion . research and development expenses the $ 9.9 million increase in research and development expenses for the year ended december 31 , 2017 as compared to 2016 was primarily due to an increase of $ 9.1 million in employee headcount to support clinical trials and partnerships and an increase of $ 1.0 million in non-cash stock-based compensation . these increases were offset by a decrease of $ 3.9 million in expenses related to our darpa ebola grant , among other variances . general and administrative expenses the $ 4.4 million increase in general and administrative expenses for the year ended december 31 , 2017 as compared to 2016 was primarily due to increases in employee headcount , non-cash stock based compensation , rent expense and depreciation expense of $ 1.9 million ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | working capital and liquidity as of december 31 , 2018 , we had cash and short-term investments of $ 81.2 million and working capital of $ 52.5 million , as compared to $ 127.4 million and $ 103.0 million as of december 31 , 2017 , respectively . the decrease in cash and short-term investments during the year ended december 31 , 2018 was primarily due to our operating expenses and capital expenditures , partially offset by the sales of our common stock under our atm sales agreements during the period as well as the net proceeds received from apollobio . net cash used in operating activities for the year ended december 31 , 2018 of $ 73.6 million consisted of net loss of $ ( 97.0 ) million less changes in net operating assets and liabilities of $ 4.7 million , partially offset by net non-cash adjustments of $ 18.7 million . the primary non-cash expenses were stock-based compensation of $ 10.7 million , depreciation and amortization of $ 5.0 million and loss on investment in affiliated entities and short-term investments of $ 2.0 million and $ 1.3 million , respectively . net cash used in operating activities for the year ended december 31 , 2017 of $ 63.2 million consisted of net loss of $ ( 88.2 ) million less changes in net operating assets and liabilities of $ 2.9 million , partially offset by net non-cash adjustments of $ 22.1 million.
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we anticipate that our expenses will increase significantly as we continue our current research programs and development activities ; seek to identify additional research programs and additional product candidates , conduct initial drug application supporting preclinical studies and initiate clinical trials for our product candidates ; initiate preclinical testing and clinical trials for any other product candidates we identify and develop , maintain , expand and protect our intellectual property portfolio , further develop our gene editing platform ; hire additional research , clinical and scientific personnel ; and incur additional costs associated with operating as a public company . collaboration agreement and joint venture agreement in october 2015 , we entered into a strategic research collaboration agreement with vertex focused on the development of crispr/cas9-based therapies . under the terms of our agreement , we received an upfront , nonrefundable payment of $ 75.0 million and $ 30.0 million in convertible loan proceeds . in december 2015 , we entered into an agreement , the jv agreement , with bayer healthcare to create a joint venture , casebia therapeutics llp , ( “ casebia ” or “ the jv ” ) , to discover , develop and commercialize new breakthrough therapeutics to cure blood disorders , blindness and heart disease . we and bayer healthcare each have a 50 % interest in the jv . under the jv agreement , bayer healthcare is making available its protein engineering expertise and relevant disease know-how and we are contributing our proprietary crispr/cas9 gene editing technology and intellectual property . bayer healthcare will also provide up to $ 300.0 million in research and development investments to the jv over the first five years , subject to specified conditions . 79 in connection with the jv agreement , the jv was required to pay us an aggregate amount of $ 35.0 million technology access fee , consisting of an upfront payment of $ 20.0 million , which was paid at the closing of the jv agreement in march 2016 , and another payment of $ 15.0 million for specified intellectual property rights relating to our crispr/cas9 technology outside of the united states , which was paid in december 2016. in january 2016 , we also issued a convertible loan to bayer bv ( the “ bayer convertible loan ” ) for gross proceeds of $ 35.0 million which was immediately converted to series b preferred shares at a conversion price of $ 13.43 per share . concurrent with the ipo in october 2016 , we issued and sold 2,500,000 common shares to bayer bv , at the ipo price of $ 14.00 per share resulting in aggregate net proceeds of $ 35.0 million . financial overview revenue we have not generated any revenue to date from product sales and do not expect to do so in the near future . during the year ended december 31 , 2016 , and 2015 , we recognized $ 5.2 million and $ 0.2 million , respectively , of revenue related to our collaboration agreements with vertex and casebia . as of december 31 , 2016 , we had not received any milestone or royalty payments under the vertex collaboration agreement . for additional information about our revenue recognition policy , see the “ critical accounting policies and estimates— revenue . ” research and development expenses research and development expenses consist primarily of costs incurred for our research activities , including our product discovery efforts and the development of our product candidates , which include : employee-related expenses , including salaries , benefits and equity-based compensation expense ; costs of services performed by third parties that conduct research and development and preclinical activities on our behalf ; costs of purchasing lab supplies and non-capital equipment used in our preclinical activities and in manufacturing preclinical study materials ; consultant fees ; facility costs , including rent , depreciation and maintenance expenses ; and fees and other payments related to acquiring and maintaining licenses under our third-party licensing agreements . research and development costs are expensed as incurred . nonrefundable advance payments for research and development goods or services to be received in the future are deferred and capitalized . the capitalized amounts are expensed as the related goods are delivered or the services are performed . at this time , we can not reasonably estimate or know the nature , timing or estimated costs of the efforts that will be necessary to complete the development of any product candidates we may identify and develop . this is due to the numerous risks and uncertainties associated with developing such product candidates , including the uncertainty of : successful completion of preclinical studies and investigational new drug-enabling studies ; successful enrollment in , and completion of , clinical trials ; receipt of marketing approvals from applicable regulatory authorities ; establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers ; obtaining and maintaining patent and trade secret protection and non-patent exclusivity ; launching commercial sales of the product , if and when approved , whether alone or in collaboration with others ; acceptance of the product , if and when approved , by patients , the medical community and third-party payors ; effectively competing with other therapies and treatment options ; a continued acceptable safety profile following approval ; enforcing and defending intellectual property and proprietary rights and claims ; and achieving desirable medicinal properties for the intended indications . a change in the outcome of any of these variables with respect to the development of any product candidates we may develop could significantly change the costs , timing and viability associated with the development of that product candidate . 80 except for activities we perform in connection with our collaborations with vertex and casebia , we do not track research and development costs on a program-by-program basis . story_separator_special_tag the terms of our collaboration and license agreements contain multiple deliverables , which include licenses to crispr/cas9-based therapeutic products directed to specific targets , referred to as exclusive licenses , as well as research and development activities to be performed by us on behalf of the collaboration partner related to the licensed targets . payments that we may receive under these agreements include nonrefundable technology access fees , payments for research activities , payments based upon the achievement of specified milestones and royalties on any resulting net product sales . multiple element arrangements we evaluate multiple-element arrangements to determine ( i ) the deliverables included in the arrangement and ( ii ) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a combined unit of accounting . when deliverables are separable , consideration received is allocated to the separate units of accounting based on the relative selling price method and the appropriate revenue recognition principles are applied to each unit . when we determine that an arrangement should be accounted for as a single unit of accounting , we must determine the period over which the performance obligations will be performed and revenue will be recognized . this evaluation requires us to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship . deliverables are considered separate units of accounting provided that ( i ) the delivered item has value to the customer on a standalone basis and ( ii ) the arrangement includes a general right of return with respect to the delivered item , delivery or performance of the undelivered item is considered probable and substantially in our control . in assessing whether an item has standalone value , we consider factors such as the research , development , manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace . in addition , we consider whether the collaboration partner can use any other deliverable for its intended purpose without the receipt of the remaining deliverable , whether the value of the deliverable is dependent on the undelivered item , and whether there are other vendors that can provide the undelivered items . the consideration received under an arrangement that is fixed or determinable is then allocated among the separate units of accounting based on the relative selling prices of the separate units of accounting . we determine the selling price of a unit of accounting within each arrangement using ( i ) vendor-specific objective evidence of selling price , if available ; ( ii ) third-party evidence of selling price if vendor-specific objective evidence is not available ; or ( iii ) best estimate of selling price , if neither vendor-specific objective evidence nor third-party evidence is available . determining the best estimate of selling price for a unit of accounting requires significant judgment . in developing the best estimate of selling price for a unit of accounting , we consider applicable market 86 conditions and relevant entity-specific factors , including factors that were contemplated in negotiating the agreement with the customer and estimated costs . we validate the best estimate of selling price for units of accounting by evaluating whether changes in the key assumptions used to determine the best estimate of selling price will have a significant effect on the allocation of arrangement consideration between multiple units of accounting . we recognize arrangement consideration allocated to each unit of accounting when all of the revenue recognition criteria are satisfied for that particular unit of accounting . in the event that a deliverable does not represent a separate unit of accounting , we recognize revenue from the combined unit of accounting over the contractual or estimated performance period for the undelivered items , which is typically the term of our research and development obligations . if there is no discernible pattern of performance or objectively measurable performance measures do not exist , then we recognize revenue under the arrangement on a straight-line basis over the period we are expected to complete our performance obligations . conversely , if the pattern of performance over which the service is provided to the customer can be determined and objectively measurable performance measures exist , then we recognize revenue under the arrangement using the proportional performance method . revenue recognized is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned , as determined using the straight-line method or proportional performance method , as applicable , as of the period ending date . significant management judgment is required in determining the level of effort required under an arrangement and the period over which we are expected to complete our performance obligations under an arrangement . steering committee services that are not inconsequential or perfunctory and that are determined to be performance obligations are combined with other research services or performance obligations required under an arrangement , if any , in determining the level of effort required in an arrangement and the period over which we expect to complete our aggregate performance obligations . recognition of milestones and royalties our collaboration and license agreements include contingent milestone payments related to specific development , regulatory and sales-based milestones . development and regulatory milestones are typically payable when a product candidate initiates or advances in clinical trial phases , upon submission for marketing approval with regulatory authorities , and upon receipt of actual marketing approvals for a therapeutic or for additional indications . sales-based milestones are typically payable when annual sales reach specified levels . we evaluate whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone . this evaluation includes an assessment of whether : ( i ) the consideration is commensurate with either our performance to achieve the milestone or the enhancement of the value of
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows the following table provides information regarding our cash flows for each of the period below : replace_table_token_5_th net cash ( used in ) provided by operating activities net cash used in operating activities was $ 55.3 million for the year ended december 31 , 2016 and primarily consisted of a net loss of $ 23.2 million adjusted for non-cash items ( including equity-based compensation expense of $ 10.8 million , non-cash interest expense of $ 8.1 million , depreciation and amortization expense of $ 0.9 million , loss from equity method investment of $ 36.4 million , other income of $ 78.6 million recognized in connection with the formation of our jv with bayer healthcare , and a gain on extinguishment of the vertex convertible loan of $ 11.5 million ) , an increase in prepaid expenses and other current assets of $ 1.1 million , and an increase in accounts receivable of $ 2.8 million , and an increase in restricted cash of $ 2.5 million , partially offset by an increase in accounts payable and accrued expenses of $ 3.9 million , deferred revenue of $ 1.9 million , and deferred rent of $ 2.4 million .
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however , enrollment in this clinical trial has been temporarily suspended due to issues internal to nci and unrelated to our technology . the progress and timeline for this trial , including the timeline for dosing patients , are under the control of the nci . we are developing chimeric antigen receptor , or car , t cell , or car+ t , therapies targeting cd19 on malignant b cells using our sleeping beauty platform . we are advancing our so-called rapid personalized manufacture , or rpm , technology , in greater china with eden biocell , ltd. , or eden biocell , our joint venture with triarm therapeutics , ltd. rpm enables small numbers of t cells to be infused as soon as the day after gene transfer which is made possible by the genetic modification of resting t cells to express car and membrane bound il-15 , or mbil15 . eden biocell is leading the clinical development and commercialization of sleeping beauty-generated cd19-specific rpm car+t therapies using patient-derived ( autologous ) t cells in order to treat patients with relapsed or refractory cd19+ leukemias and lymphomas . in the fourth quarter of 2020 , an ind was cleared by the taiwan fda for a phase 1 clinical trial designed to evaluate safety and efficacy in this patient group . in our phase 1 clinical trial being conducted in the united states , we plan to infuse donor-derived t cells after allogeneic bone marrow transplantation , or bmt , for recipients who have relapsed with cd19+ leukemias and lymphomas with our cd19- specific car+ t therapies manufactured using our technology . our controlled il-12 platform is based on an engineered replication-incompetent adenovirus , referred to as ad-rts-hil-12 , plus veledimex as a gene delivery system to conditionally produce il-12 , a potent , naturally occurring anti-cancer protein , to treat patients with solid tumors . our controlled il-12 platform allows us to deliver il-12 in a tunable dose as the cytokine is under transcriptional control of the rheoswitch therapeutic system ® ( rts ® ) . we have completed enrollment to all our phase 1 and 2 clinical trials of patients with recurrent glioblastoma multiforme , or rgbm . these trials examine the effect of controlled il-12 as a monotherapy and in combination with blockade of the immune checkpoint protein pd-1 . dosing is ongoing in a phase 2 clinical trial evaluating ad-rts-hil-12 plus veledimex in combination with pd1 antibody libtayo ® ( cemiplimab-rwlc ) for the treatment of recurrent or progressive glioblastoma multiforme in adults . data from our monotherapy and combination studies have been presented at major scientific conferences . as of december 31 , 2020 , we have approximately $ 115.1 million of cash and cash equivalents . given our current development plans , we anticipate our cash resources will be sufficient to fund our operations into the second quarter of 2022 , and we have no committed sources of additional capital at this time . the forecast of cash resources is forward-looking information that involves risks and uncertainties , and the actual amount of our expenses could vary materially and adversely as a result of a number of factors . we have based our estimates on assumptions that may prove to be wrong , and our expenses could prove to be significantly higher than we currently anticipate . management does not know whether additional financing will be on terms favorable or 75 acceptable to us when needed , if at all . if adequate additional funds are not available when required , or if we are unsuccessful in entering into partnership agreements for further development of our product candidates , management may need to curtail its development efforts and planned operations . our amended and restated certificate of incorporation authorizes us to issue 250,000,000 shares of common stock . as of february 24 , 2020 , there were 214,667,023 shares of common stock outstanding and an additional 31,115,329 shares of common stock reserved for issuance pursuant to outstanding stock options and warrants . though we have no immediate plans to issue additional shares of common stock , other than in connection with our 2020 equity incentive plan , we may need additional shares for business and financial purposes in the future . we have not generated significant revenue and have incurred significant net losses in each year since our inception . for the year ended december 31 , 2020 , we had a net loss of $ 80.0 million , and through december 31 , 2020 , we have incurred approximately $ 764.1 million of accumulated deficit since our inception in 2003. we expect to continue to incur significant operating expenditures and net losses . further development of our product candidates will likely require substantial increases in our expenses as we : continue to undertake clinical trials for product candidates ; seek regulatory approvals for product candidates ; work with regulatory authorities to identify and address program-related inquiries ; implement additional internal systems and infrastructure ; hire additional personnel ; and scale-up the formulation and manufacturing of our product candidates . we continue to seek additional financial resources to fund the further development of our product candidates . if we are unable to obtain sufficient additional capital , one or more of these programs could be delayed , and we may be unable to continue our operations at planned levels and be forced to reduce our operations . because of the numerous risks and uncertainties associated with product development , we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability . story_separator_special_tag the net cash used in operating activities for the year ended december 31 , 2020 was primarily a result of our net loss of $ 80.0 million , an increase in receivables of $ 1.3 million , an increase in other noncurrent assets of $ 0.6 million , offset by an decrease in prepaid expenses and other current assets of $ 11.6 million primarily related to the use of funds at md anderson and an increase in accounts payable and accrued expenses of $ 5.3 million . the net cash used in operating activities for the year ended december 31 , 2019 was primarily a result of our net loss of $ 117.8 million , an increase in receivables of $ 1.5 million , an increase in prepaid expenses and other current assets of $ 1.7 million , offset by a decrease in other noncurrent assets of $ 9.4 million , and an increase in accounts payable and accrued expenses of $ 1.9 million . net cash used in operating activities for the year ended december 31 , 2018 was primarily a result of our net loss of $ 53.1 million , an increase in receivables of $ 1.9 million , an increase of prepaid expenses and other current assets of $ 1.3 million , and a decrease in accounts payable and accrued expenses of $ 4.8 million , offset by a decrease of other noncurrent assets of $ 4.0 million . net cash used in investing activities was $ 9.8 million for the year ended december 31 , 2020 compared to $ 284 thousand and $ 459 thousand for the years ended december 31 , 2019 and december 31 , 2018 , respectively . the change was due primarily to increases in equipment purchases and leasehold improvements under our agreement with md anderson to build out space in houston , texas during the year ended december 31 , 2020. net cash provided by financing activities was $ 102.1 million for the year ended december 31 , 2020 compared to net cash provided by financing activities of $ 59.2 million and $ 40.3 million provided by financing activities for the years ended december 31 , 2019 and 2018 , respectively . the $ 102.1 million provided by financing activities during the year ended december 31 , 2020 , is a result of net proceeds of $ 88.7 million from the issuance of common stock in our follow-on public offering , net and $ 13.0 million from the issuance of common stock pursuant to our atm facility . the $ 59.2 million provided by financing activities during the year ended december 31 , 2019 is a result of net proceeds from the issuance of common stock upon exercise of warrants of $ 52.5 million , net proceeds from the issuance in connection with an at the market offering of $ 6.1 million , proceeds from the exercise of stock options of $ 1.2 million , offset by $ 0.7 million used to repurchase common stock . the $ 40.3 million provided by financing activities during the year ended december 31 , 2018 is a result of net proceeds of $ 47.1 million from our november 2018 financing which were offset by cash paid of $ 5.4 million from our license agreement and $ 1.6 million paid for the repurchase of common stock . operating capital and capital expenditure requirements we anticipate that losses will continue for the foreseeable future . at december 31 , 2020 , our accumulated deficit was approximately $ 764.1 million . our actual cash requirements may vary materially from those planned because of a number of factors including : changes in the focus , direction and pace of our development programs ; competitive and technical advances ; costs associated with the development of our product candidates ; our ability to secure partnering arrangements ; costs of filing , prosecuting , defending and enforcing any patent claims and any other intellectual property rights , or other developments ; and other matters identified under part i – item 1a . “ risk factors . ” 83 working capital as of december 31 , 2020 was $ 112.2 million , consisting of $ 130.6 million in current assets and $ 18.4 million in current liabilities . working capital as of december 31 , 2019 was $ 93.0 million , consisting of $ 105.5 million in current assets and $ 12.5 million in current liabilities . contractual obligations the following table summarizes our outstanding obligations as of december 31 , 2020 and the effect those obligations are expected to have on our liquidity and cash flows in future periods : replace_table_token_6_th our commitments for operating leases relate to the lease for our corporate headquarters in boston , massachusetts , and laboratory and office space in houston , texas . on december 21 , 2015 and april 15 , 2016 , we renewed the sublease for our corporate headquarters in boston , ma through august 31 , 2021. on january 30 , 2018 , we entered into a lease agreement for office space in houston , tx at md anderson through april 2021. on march 12 , 2019 , we entered into a lease agreement for additional office space in houston through april 2021. on october 15 , 2019 , we entered into another lease agreement for additional office space in houston through february 2027. on april 13 , 2020 , we entered into another lease agreement for additional office and laboratory space in houston through february 2027. on june 1 , 2020 , we entered into a short-term lease in houston for office and laboratory space . on september 1 , 2020 , we entered an additional short-term lease in houston for additional office and laboratory space . on december 15 , 2020 , we entered into another lease for additional office and laboratory space in houston through april 2028. on january 10 , 2017 , we announced the signing of
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | sources of liquidity to date , we have financed our operations primarily through public offerings of our common stock , private placements of our convertible equity securities and collaborations . through december 31 , 2020 , we have received an aggregate of $ [ ● ] from public offerings and through our “ at-the-market ” offering program . liquidity and capital resources as of december 31 , 2020 , we have approximately $ 115.1 million of cash and cash equivalents . given our current development plans , in addition to our recent financing , we anticipate cash resources will be sufficient to fund our operations into the second quarter of 2022 , and we have no committed sources of additional capital at this time . the forecast of cash resources is forward-looking information that involves risks and uncertainties , and the actual amount of our expenses could vary materially and adversely as a result of a number of factors . we have based our estimates on assumptions that may prove to be wrong , and our expenses could prove to be significantly higher than we currently anticipate . management does not know whether additional financing will be on terms favorable or acceptable to us when needed , if at all . if adequate additional funds are not available when required , or if we are unsuccessful in entering into partnership agreements for further development of our products , management may need to curtail development efforts . 80 in addition to these factors , our actual cash requirements may vary materially from our current expectations for a number of other factors that may include , but are not limited to , changes in the focus and direction of our development programs , competitive and technical advances , costs associated with the development of our product candidates , our ability to secure partnering arrangements , and the costs of filing , prosecuting , defending and enforcing our intellectual property rights .
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in addition , during the fourth quarter of 2020 , the company experienced an impact to gross margin from freight surcharges related to increased digital penetration across the retail industry resulting from the covid-19 pandemic . additionally , social distancing measures or changes in consumer spending behaviors due to covid-19 may continue to impact store traffic which could result in a loss of sales and profit . as our stores reopened , we implemented numerous social distancing and safety measures which remain in place . these include providing personal protective equipment to our associates , implementing a more rigorous cleaning process , 22 including enhanced cleaning of high touch surfaces throughout the day , installing protective barriers at all registers , and requiring associates and customers to wear face coverings while inside our stores . to encourage social distancing , we installed social distancing signage and markers throughout the store , closed our fitting rooms , widened aisles by removing in-aisle fixtures , relocated amazon returns to a separate area of the store , and are limiting occupancy in stores as appropriate . we also implemented a new process for handling merchandise returns , reduced store operating hours , and are providing dedicated shopping hours for at-risk individuals . the chart below details costs that we believe are directly attributable to covid-19 : ( dollars in millions ) twelve months ended description classification january 30 , 2021 inventory write-downs cost of merchandise sold $ 187 net compensation and benefits selling , general , and administrative 73 other costs selling , general , and administrative 55 asset write-offs and other impairments , store closing , and other costs 53 total $ 368 in response to covid-19 , we took the following actions to preserve financial liquidity and flexibility during fiscal 2020 : managed inventory receipts meaningfully lower , significantly reduced expenses across all areas of the business including marketing , technology , operations , and payroll , reduced capital expenditures 61 % , suspended share repurchase program , suspended regular quarterly cash dividend beginning in the second quarter of 2020 , replaced and upsized the unsecured $ 1.0 billion revolver with a $ 1.5 billion secured facility , of which all was fully available for utilization as of year-end , issued $ 600 million of 9.5 % notes due 2025 , and completed a sale leaseback for our san bernardino e-commerce fulfillment and distribution center which generated net proceeds of $ 193 million after fees and resulted in a $ 127 million gain . we can not estimate with certainty the length or severity of this pandemic , or the extent to which the disruption may materially impact our consolidated financial statements . for fiscal 2020 , covid-19 had a material adverse effect on our business , financial condition , and results of operations . see `` results of operations `` and `` liquidity and capital resources `` for additional details about our financial results . our vision and strategy as part of our continued efforts to stay ahead in the rapidly changing retail environment , we introduced a new strategic framework in october 2020. the company 's new vision is to be “ the most trusted retailer of choice for the active and casual lifestyle . ” this new strategy is designed to create long-term shareholder value and has four key focus areas : driving top line growth , expanding operating margin , maintaining disciplined capital management , and sustaining an agile , accountable , and inclusive culture . 23 driving top line growth our initiatives include expanding kohl 's active and outdoor business to at least 30 % of net sales , reigniting growth in the women 's business , building a sizable beauty business , driving category productivity and inventory turn , and capturing market share from the retail industry disruption . we have already taken significant steps in these areas , including forming a new major long-term strategic partnership with sephora , the largest prestige beauty retailer in the world , where sephora will become kohl 's exclusive beauty partner . we plan for this partnership to bring the “ sephora at kohl 's ” experience to 200 stores and online beginning in fall 2021 , and to at least 850 locations by 2023. we expect this strategic partnership to drive incremental customer traffic , significantly grow the company 's beauty business , and positively impact sales across other categories . our loyalty and value efforts include simplifying the value delivered to our customers and maintaining our industry-leading loyalty program , which includes kohl 's rewards and the kohl 's card . we will also continue to offer a compelling and differentiated omnichannel experience through modernized stores and an enhanced digital platform . expanding operating margin we have established a goal of expanding the company 's operating margin with a multi-year plan of achieving 7 % to 8 % . to achieve that goal , we are focused on driving both gross margin improvement and selling , general , and administrative expense leverage . our gross margin initiatives include disciplined inventory management and increased inventory turn , optimized pricing and promotion strategies , efficient sourcing , and a transformed end-to-end supply chain . our initiatives to drive selling , general , and administrative expense efficiency are focused on store expenses , marketing , technology , and corporate expenses . maintaining disciplined capital management we are committed to prudent balance sheet management with the long-term objective of sustaining kohl 's investment grade credit rating . the company has a long history of strong cash flow generation , investing in the business , and returning significant capital to shareholders—all of which will remain important in the future . sustaining an agile , accountable , and inclusive culture fostering a diverse , equitable , and inclusive environment for kohl 's associates , customers , and suppliers is an important focus of ours . story_separator_special_tag we do not have any arrangements or relationships with entities that are not consolidated into the financial statements that are reasonably likely to materially affect our financial condition , liquidity , results of operations , or capital resources . 35 critical accounting policies and estimates the preparation of financial statements in conformity with accounting principles generally accepted in the united states requires us to make estimates and assumptions that affect reported amounts . management has discussed the development , selection , and disclosure of these estimates and assumptions with the audit committee of our board of directors . retail inventory method and inventory valuation merchandise inventories are valued at the lower of cost or market using the retail inventory method ( “ rim ” ) . under rim , the valuation of inventory at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value of inventory . rim is an averaging method that has been widely used in the retail industry due to its practicality . the use of rim will result in inventory being valued at the lower of cost or market since permanent markdowns are taken as a reduction of the retail value of inventories . a reserve is recorded if the future estimated selling price is less than cost . rim inherently requires management judgment and estimates , such as the amount and timing of permanent markdowns to clear unproductive or slow-moving inventory , which may impact the ending inventory valuation as well as gross margin . factors considered in the determination of permanent markdowns include current and anticipated demand , customer preferences , age of the merchandise , fashion trends , and weather conditions . inventory shrinkage is estimated as a percent of sales for the period between the last physical inventory count and the balance sheet date . shrink is the difference between the recorded amount of inventory and the physical inventory . we perform an annual physical inventory count at the majority of our stores , e-commerce fulfillment centers , and distribution centers . the shrinkage rate from the most recent physical inventory , in combination with current events and historical experience , is used as the standard for the shrinkage accrual rate for the next inventory cycle . historically , our actual physical inventory count results have shown our estimates to be reliable . vendor allowances we frequently receive allowances from our vendors for markdowns that we have taken in order to sell the vendor 's merchandise and or to support gross margins earned on those sales . this markdown support generally relates to sold inventory or permanent markdowns and , accordingly , is reflected as a reduction to cost of merchandise sold . markdown support related to merchandise that has not yet been sold is recorded in inventory . we also receive support from vendors for marketing and other costs that we have incurred to sell the vendors ' merchandise . to the extent the reimbursements are for specific , incremental , and identifiable costs incurred to sell the vendor 's products and do not exceed the costs incurred , they are recognized as a reduction of selling , general , and administrative expenses . if these criteria are not met , the support is recorded in inventory and reflected as a reduction of costs of merchandise sold when the related merchandise is sold . insurance reserve estimates we are primarily self-insured for costs related to workers ' compensation , general liability , and employee-related health care benefits . we use a third-party actuary to estimate the liabilities associated with these risks . the actuary considers historical claims experience , demographic and severity factors , health care trends , and actuarial assumptions to estimate the liabilities associated with these risks . historically , our actuarial estimates have not been materially different from actual results . 36 impairment of long-lived assets we review our long-lived assets for impairment when events or changes in circumstances , such as decisions to close a store or significant cash flow losses , indicate the carrying value of the asset may not be recoverable . all long-lived assets are reviewed for impairment at least annually . if our evaluations , which are performed on an undiscounted cash flow basis , indicate that the carrying amount of the asset may not be recoverable , the potential impairment is measured as the excess of carrying value over the fair value of the impaired asset . identifying impaired assets and quantifying the related impairment loss , if any , requires significant estimates by management . the most significant of these estimates is the cash flow expected to result from the use and eventual disposition of the asset . when determining the stream of projected future cash flows associated with an individual store , management estimates future store performance including sales , gross margin , and controllable expenses , such as store payroll and occupancy expense . projected cash flows must be estimated for future periods throughout the remaining life of the property , which may be as many as 40 years in the future . the accuracy of these estimates will be impacted by a number of factors including general economic conditions , changes in competitive landscape and our ability to effectively manage the operations of the store . income taxes we regularly evaluate the likelihood of realizing the benefit for income tax positions we have taken in various federal and state filings by considering all relevant facts , circumstances , and information available to us . if we believe it is more likely than not that our position will be sustained , we recognize a benefit at the largest amount which we believe is cumulatively greater than 50 % likely to be realized . unrecognized tax benefits require significant management judgment regarding applicable statutes and their related interpretation , the status of various income tax audits , and our particular facts and circumstances
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash uses cash sources operational needs , including salaries , rent , taxes , and other operating costs capital expenditures inventory share repurchases dividend payments debt reduction cash flow from operations short-term trade credit , in the form of extended payment terms line of credit under our revolving credit facility issuance of debt our working capital and inventory levels typically build throughout the fall , peaking during the november and december holiday selling season . due to covid-19 , typical working capital and inventory patterns did not occur in 2020. the following table includes cash balances and changes : replace_table_token_9_th ( a ) non-gaap financial measure operating activities operating activities generated cash of $ 1.3 billion in 2020 compared to cash of $ 1.7 billion in 2019. the decrease was primarily attributable to the decline in net income resulting from decreased sales due to the temporary nationwide store closures due to covid-19 and changes in other current and long-term assets offset by the decrease in merchandise inventories . operating activities generated cash of $ 1.7 billion in 2019 compared to cash of $ 2.1 billion in 2018. the decrease was primarily attributable to lower net income and changes in accrued and other operating liabilities . investing activities net cash used in investing activities decreased $ 700 million to $ 137 million in 2020. the decrease was due to reductions in capital spending as part of our response to covid-19 as well as the proceeds from the sale of real estate . net cash used in investing activities increased $ 265 million to $ 837 million in 2019. the increase was primarily due to the investments in our sixth e-commerce fulfillment center , store strategies that include new stores and capital improvements to existing stores , and technology investments . 31 the fo llowing chart summarizes capital expenditures by major category : financing activities financing activities generated cash of $ 347 million in 2020 compared to $ 1.0 billion used in 2019. in march 2020 , we fully drew down our $ 1.0 billion senior unsecured revolver .
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million for 2016 . please see footnotes 3 and 5 to the other financial and operating data table in “ item 6. selected financial data ” in this form 10-k for a reconciliation of revenue ex-tac to revenue and adjusted ebitda to net income , the most directly comparable financial measures calculated and presented in accordance with u.s. gaap . we are focused on maximizing revenue ex-tac . we believe this focus builds sustainable long-term value for our business and fortifies a number of our competitive strengths , including a highly liquid marketplace for display advertising . as part of this focus , we seek to maximize our percentage of overall marketing spend in the internet display advertising market over the long-term . in addition , this focus enriches liquidity for both advertisers and publishers resulting in more effective advertising for the advertiser , better monetization for the publisher and more relevant advertisements for the user . we believe our results of operations reflect this focus . acquisitions on november 9 , 2016 , we completed the acquisition of all of the outstanding shares of hooklogic , a new york-based company connecting many of the world 's largest e-commerce retailers with consumer brand manufacturers . we now offer hooklogic 's products under the `` criteo sponsored products `` name . please refer to note 2 to our audited consolidated financial statements included elsewhere in this form 10-k for further details . on may 31 , 2016 , we acquired all of the outstanding shares of monsieur drive , a paris-based company building advertising products for the consumer packaged goods vertical . please refer to note 2 to our audited consolidated financial statements included elsewhere in this form 10-k for further details . in february 2015 , we acquired datapop , a los angeles-based company specializing in the optimization of shopping campaigns on large search engines . we launched criteo predictive search in october 2016. in april 2014 , we completed the acquisition of adquantic , a bidding technology company headquartered in paris . through the acquisition of adquantic , we added a team of seven experts in bidding technology , reinforcing our focus on research and development . in february 2014 , we acquired tedemis , a provider of real-time personalized e-mail marketing solutions that help advertisers turn web visitors into customers . with the addition of tedemis , we extended our digital performance marketing solution to a new marketing channel . 67 transition to u.s. gaap and change in reporting currency as of june 30 , 2015 , we no longer met the requirements to qualify as a foreign private issuer under the exchange act . as a result , we began reporting as a domestic registrant as of january 1 , 2016 and we are required under current sec rules to prepare our financial statements in accordance with u.s. gaap , rather than ifrs , and to present our financial information in u.s. dollars instead of euros . the transition from consolidated financial statements under ifrs to u.s. gaap only impacted the presentation of our consolidated statement of financial position ( order of liquidity ) and of our consolidated statement of cash flows ( effect of exchange rate changes on cash and cash equivalents ) . the functional currency of the company remains the euro , while our reporting currency changed from the euro to the u.s. dollar . consequently , since we incur portions of our expenses and derive revenues in currencies other than the euro , we are exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates . foreign exchange risk exposure also arises from intra-company transactions and financing with subsidiaries that have a functional currency different than the euro . the statements of financial position of consolidated entities having a functional currency different from the u.s. dollar are translated into u.s. dollars at the closing exchange rate ( spot exchange rate at the statement of financial position date ) and the statements of income , statements of comprehensive income and statements of cash flow of such consolidated entities are translated at the average period to date exchange rate . the resulting translation adjustments are included in equity under the caption “ accumulated other comprehensive income ” in the consolidated statements of changes in equity . a. operating results . basis of presentation the key elements of our results of operations include : revenue we sell internet display advertisements featuring product-level recommendations either directly to clients or to advertising agencies , which we collectively refer to as our clients . we generate revenue generally when a user clicks on a banner advertisement of one of our advertiser clients . while accessing publishers ' supply of inventory in sufficient quantity and quality is a critical requirement for us to successfully conduct our business , we do not generate any revenue directly from our relationships with publishers . in the specific case of criteo predictive search , we do not not price our service on a cpc basis and get paid a percentage of sales generated by a client 's google shopping campaigns , which means we only get paid for completed sales . we recognize revenue from the delivery of display advertisements in the period in which the display advertisements are delivered . specifically , we recognize revenue for display ad delivery through our solution once the consumer clicks on the personalized banner displayed by us on the client 's website for cpc ad campaigns . for cpc ad campaigns , sales are valued at the fair value of the amount received . rebates and discounts granted to clients , along with free or extended advertising campaigns , are recorded as a deduction from revenue . essentially all of our revenue in each of 2014 , 2015 and 2016 was derived from advertising campaigns sold on a cpc basis . story_separator_special_tag in determining whether we act as the principal or an agent , we follow the accounting guidance for principal-agent considerations . the determination of whether we are acting as a principal or an agent in a transaction involves judgment and is based on an evaluation of the terms of each arrangement . while none of the factors individually are considered presumptive or determinative , because we are the primary obligor and are responsible for ( 1 ) identifying and contracting with third-party clients , ( 2 ) establishing the selling prices of the display advertisements sold , ( 3 ) performing all billing and collection activities , including retaining credit risk , and ( 4 ) bearing sole responsibility for fulfillment of the advertising and the inventory risk , we act as the principal in these arrangements and therefore report revenue earned and costs incurred related to these transactions on a gross basis . with criteo predictive search , we do not purchase search inventory ourselves ; our advertiser clients have direct access to google shopping inventory and buy such inventory themselves . as a result of not incurring inventory costs related to these transactions , we act as an agent for our clients with respect to these transactions . consequently , revenue for criteo predictive search is reported on a net basis . in the specific case of criteo sponsored products , we may act as the principal or as the agent depending on the type of service sold to the advertiser . as a result , depending on the service sold through criteo sponsored products , we report revenue earned and costs incurred related to these transactions on a gross basis or on a net basis . trade receivables , net of allowances for doubtful accounts we carry our accounts receivable at net realizable value . on a periodic basis , our management evaluates our accounts receivable and determines whether to provide an allowance or if any accounts should be written down and charged to expense as a bad debt . the evaluation is based on a past history of collections , current credit conditions , the length of time the trade receivable is past due and a past history of write downs . a trade receivable is considered past due if we have not received payments based on agreed-upon terms . a higher default rate than estimated or a deterioration in our major clients ' creditworthiness could have an adverse impact on our future results . allowances for doubtful accounts on trade receivables are recorded in “ sales and operations ” in our consolidated statements of income . we generally do not require any security or collateral to support our trade receivables . the amount of allowance for doubtful accounts charged to our consolidated statements of income for the years ended december 31 , 2014 , 2015 and 2016 was $ 1.3 million , $ 2.7 million and $ 5.4 million , respectively and represented 0.7 % , 1.1 % and 1.5 % of our trade receivables , net of allowances , as of december 31 , 2014 , 2015 , and 2016 , respectively . 72 deferred tax assets deferred taxes are recorded on all temporary differences between the financial reporting and tax bases of assets and liabilities , and on tax losses , using the liability method . differences are defined as temporary when they are expected to reverse within a foreseeable future . we may only recognize deferred tax assets if , based on the projected taxable incomes within the next three years , we determine that it is probable that future taxable profit will be available against which the unused tax losses and tax credits can be utilized . as a result , the measurement of deferred income tax assets is reduced , if necessary , by a valuation allowance for any tax benefits which are not expected to be realized . if future taxable profits are considerably different from those forecasted that support recording deferred tax assets , we will have to revise downwards or upwards the amount of the deferred tax assets , which would have a significant impact on our financial results . this determination requires many estimates and judgments by our management for which the ultimate tax determination may be uncertain . amounts recognized in our consolidated financial statements are calculated at the level of each subsidiary within our consolidated financial statements . as at december 31 , 2014 , 2015 and 2016 , the valuation allowance against net deferred taxes amounted to $ 26.1 million , $ 24.0 million and $ 19.9 million , respectively . it mainly related to criteo corp. ( $ 13.9 million , $ 12.4 million and $ 0.9 million , respectively ) , criteo do brasil ( $ 2.6 million , $ 3.9 million and $ 3.6 million , respectively ) , criteo ltd ( united kingdom ) ( $ 7.7 million , $ 4.7 million and $ 4.7 million , respectively ) , criteo china ( $ 0.8 million , $ 1.4 million and $ 3.7 million , respectively ) and criteo france ( $ 0.7 million , $ 0.6 million and $ 3.0 million , respectively ) . business combinations we apply the provisions of asc topic 805 business combinations ( topic 805 ) for our acquisitions . it requires us to recognize separately from goodwill , the assets acquired and the liabilities assumed at their acquisition date fair values . goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed . while we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration , where applicable , our estimates are inherently uncertain and subject to refinement . as a result , during the measurement period ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources . market risk we are mainly exposed to changes of foreign currency exchange rate fluctuations . the functional currency of the company is the euro , while our reporting currency is the u.s. dollars . consequently , as a first step , since we incur portions of our expenses and derive revenues in currencies other than the euro , we are exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates . foreign exchange risk exposure also arises from intra-company transactions and financing with subsidiaries that have a functional currency different than the euro . the statements of financial position of consolidated entities having a functional currency different from the u.s. dollar are translated into u.s. dollars at the closing exchange rate ( spot exchange rate at the statement of financial position date ) and the statement of income , statement of comprehensive income and statement of cash flow of such consolidated entities are translated at the average period to date exchange rate . the resulting translation adjustments are included in equity under the caption “ accumulated other comprehensive income ” in the consolidated statement of changes in equity . the significant foreign exchange income of $ 10.1 million for the period ended december 31 , 2014 was primarily a result of the translation of $ 90 million of our initial public offering proceeds into euros at the foreign exchange closing rate , then translated into the u.s. dollar according to the average exchange rate euro / u.s. dollar generating a $ 11.8 million gain , partially offset by the cost of premiums on related hedging instruments ( $ 2.9 million ) . the material foreign exchange loss for the period ended december 31 , 2015 was mainly a result of the weakening of the brazilian real which resulted in losses on intra-group positions denominated in this currency , associated with a higher related cost of hedging and partially offset by the gain realized on the sale of the $ 70 million remaining from our initial public offering proceeds .
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we believe that our customers will continue to outsource a greater part of their activities to transform their value chain away from a vertically integrated model and focus on their core competencies to lower risk and improve return , with a focus on selecting outsourcing partners that are able to demonstrate the ability to provide flexible and efficient delivery models that leverage patient data to help biopharmaceutical companies deliver more effective patient outcomes . we believe that increased demand will create new opportunities for biopharmaceutical services companies , particularly those with a global reach . 41 integrated healthcare services historically has focused on biopharmaceutical companies seeking to commercialize their products . the total market served by integrated healthcare services is diverse , which makes it difficult to estimate the current amount of outsourced integrated healthcare services and the expected growth in such services . however , based on our knowledge of these markets we believe that , while the rate of outsourcing penetration varies by market within integrated healthcare services , the overall outsourcing penetration of the estimated $ 94 billion addressable market is not more than 20 % . we believe that the market for real-world and late phase research and other healthcare services will evolve and expand , and as a result , there will be opportunities to grow our revenues and expand our service offerings , including to payers who are looking to improve the cost-effectiveness of drug therapies and providers who are looking to make evidence-based decisions regarding treatment decisions . as business models continue to evolve in the healthcare sector , we believe that the growth rate for outsourcing across the integrated healthcare services markets will be similar to the growth in clinical development . acquisitions we completed a number of acquisitions in 2011 , 2012 and 2013 to enhance our capabilities and offerings in certain areas . in october 2011 , we acquired outcome , for approximately $ 164.9 million ( net of approximately $ 12.1 million of acquired cash ) to strengthen our late phase research offerings and vcg & a , inc. and its wholly owned subsidiary , vcg bio , inc. , or collectively vcg , for $ 8.7 million to strengthen our commercial services . in november 2011 , we acquired advion bioservices , inc. , for $ 54.9 million to enhance our biomarker and other advanced testing capabilities . in august 2012 , we acquired expression analysis for $ 39.7 million to enhance our genetic sequencing and advanced bioinformatics expertise . in september 2013 , we acquired novella for approximately $ 146.6 million ( net of approximately $ 26.2 million of acquired cash ) ( with contingent consideration of up to $ 21.0 million ) to complement our clinical service offerings through its focus on emerging companies and by adding expertise in oncology and medical devices . see note 14 to our audited consolidated financial statements found elsewhere in this annual report on form 10-k for additional information with respect to these acquisitions . the results of operations of acquired businesses have been included since the date of acquisition and were not significant to our consolidated results of operations . sources of revenue total revenues are comprised of service revenues and revenues from reimbursed expenses . service revenues primarily include the revenue we earn from providing product development and commercialization services to our customers , with product development services representing 76.7 % of our 2013 service revenues and commercialization services representing 22.2 % of our 2013 service revenues . our service revenues also include , or have historically included , product sales and commercial rights and royalties revenues . product sales , which are approximately 1 % or less of consolidated service revenues for all periods presented , represent sales of pharmaceutical products pursuant to distribution agreements . reimbursed expenses are comprised principally of payments to physicians ( investigators ) who oversee clinical trials and travel expenses for our clinical monitors and sales representatives . reimbursed expenses may fluctuate from period-to-period due , in part , to where we are in the lifecycle of the many contracts that are in progress at a particular point in time . for instance , these pass-through costs tend to be higher during the early phases of clinical trials as a result of patient recruitment efforts . as reimbursed expenses are pass-through costs to our customers with little to no profit and we believe that the fluctuations from period to period are not meaningful to our underlying performance , we do not provide analysis of the fluctuations in these items or their impact on our financial results . costs and expenses our costs and expenses are comprised primarily of our costs of revenues and selling , general and administrative expenses . our costs of revenues consist of service costs and reimbursed expenses . service costs include compensation and benefits for billable employees , depreciation of assets used in generating revenue and other expenses directly related to service contracts such as courier fees , laboratory supplies , professional services , travel expenses and the cost of products sold under distribution agreements . as noted above , reimbursed expenses are comprised principally of payments to physicians ( investigators ) who oversee clinical trials and travel expenses for our clinical monitors and sales representatives . selling , general and administrative expenses include costs related to administrative functions including compensation and benefits , travel , professional services , training and expenses for advertising , it , facilities and depreciation and amortization . foreign currency fluctuations the impact from foreign currency fluctuations and constant currency information assumes constant foreign currency exchange rates based on the rates in effect for the comparable prior-year period were used in translation . we believe that providing the impact of fluctuations in foreign currency rates on certain financial results can facilitate analysis of period-to-period comparisons of business performance . story_separator_special_tag we reevaluated this assertion following the ipo , as a portion of the ipo proceeds were used to pay down debt held in the united states as well as the fact we do not anticipate paying dividends in the foreseeable future , which had been significant in the past . with this reduction of debt and related interest expense and the change in approach related to payment of dividends , we expect to be able to support the cash needs of our domestic subsidiaries without repatriating cash from the affected foreign subsidiaries . we expect to utilize the cash generated outside of the united states to fund growth outside of the united states . as a result of the assertion change , we recorded an $ 8.1 million income tax benefit in the second quarter of 2013 to reverse the deferred income tax liability previously recorded on undistributed foreign earnings prior to 2013 that are now considered indefinitely reinvested outside of the united states . the favorable rate in 2011 was primarily due to an approximately $ 48.7 million benefit from the recognition of foreign tax credits related to prior years due to an increase in projected foreign source income as a result of improved operational results and the favorable impact of the 2011 refinancing transaction on future results . the rate was also favorably impacted due to a $ 16.4 million benefit for the release of foreign uncertain tax positions due to the expiration of the statute of limitations . the rate in 2011 was unfavorably impacted by $ 21.7 million of income tax expense related to the gain on the sale of our investment in invida . for financial reporting purposes , the gain on the sale is included in equity in earnings from unconsolidated affiliates ; however , our income tax on the gain is included in income tax expense . equity in ( losses ) earnings of unconsolidated affiliates replace_table_token_16_th in 2011 , we sold our investment in invida for approximately $ 103.6 million of net proceeds resulting in a gain of approximately $ 74.9 million . segments service revenues and income from operations by segment are as follows ( dollars in millions ) : replace_table_token_17_th 47 certain costs are not allocated to our segments and are reported as general corporate and unallocated expenses . these costs primarily consist of share-based compensation and expenses for corporate office functions such as senior leadership , finance , human resources , it , facilities and legal , as well as certain expenses incurred in the second quarter of 2013 including the $ 25.0 million fee incurred in connection with the termination of the management agreement with affiliates of certain shareholders and the $ 1.5 million fee paid in connection with the modification of an agreement for the business usage of an airplane owned by gfm . product development replace_table_token_18_th service revenues 2013 compared to 2012 product development 's service revenues were $ 2.9 billion in 2013 , an increase of $ 191.0 million , or 7.0 % , over 2012. this increase is comprised of constant currency revenue growth of $ 214.6 million , or 7.9 % , partially offset by a negative impact of approximately $ 23.6 million due to the effect of foreign currency fluctuations . the constant currency service revenues growth was primarily a result of a volume-related increase of $ 191.4 million in clinical solutions and services and $ 52.4 million from businesses acquired in the third quarters of 2012 and 2013 , which were partially offset by a decrease of $ 29.2 million from consulting services . our clinical solutions and services growth for 2013 was concentrated in europe and the americas . this growth was due largely to growth in the overall market as well as a consistent history of year-over-year growth in net new business , including strong inflow of net new business in 2013. this growth was tempered by a decrease in service revenues from consulting services resulting primarily from the winding down of a project assisting a customer on a regulatory compliance matter , and from a large clinical solutions project on which we were executing in 2012 and 2013 , but that is now nearing completion . 2012 compared to 2011 product development 's service revenues were $ 2.7 billion in 2012 , an increase of $ 290.9 million , or 11.9 % , over 2011. this increase is comprised of constant currency revenue growth of $ 328.6 million , or 13.5 % , partially offset by a negative impact of approximately $ 37.7 million due to the effect of foreign currency fluctuations . the constant currency service revenues growth was primarily a result of a volume-related increase of $ 238.5 million in clinical solutions and services , $ 55.3 million from consulting services and $ 34.8 million from businesses acquired in the fourth quarter of 2011 and the third quarter of 2012. our clinical solutions and services experienced growth in all regions including the americas , europe and the asia-pacific . this growth was due largely to growth in the overall market as well as a consistent history of year-over-year growth in net new business that resulted in delivery in 2012 on the higher backlog as we entered the year . also impacting the growth was an increase in global laboratories test volumes and an increase in the delivery of clinical solutions and services provided on a functional basis , principally due to the expansion of services and geographic deployment of resources on existing projects , and from the ramp up of new projects . this growth was partially offset by lower revenues from early clinical development services and was also tempered by a competitive pricing environment . service revenues from consulting services increased primarily as a result of approximately $ 47.3 million of revenue related to assisting a customer with a regulatory compliance project . 48 costs of service revenues 2013 compared to 2012 product development 's
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flow from operating activities replace_table_token_20_th 2013 compared to 2012 cash provided by operating activities increased by $ 61.7 million in 2013 as compared 2012. the increase in operating cash flow reflects lower payments for income taxes ( $ 33.0 million ) and interest ( $ 11.6 million ) in 2013. in addition , net income increased despite including cash expenses totaling $ 32.5 million for a fee paid in connection with the termination of our management agreement with affiliates of certain of our shareholders ( $ 25.0 million ) , a fee paid in connection with the modification of an agreement for the business usage of an airplane owned by gfm ( $ 1.5 million ) , and a termination fee for the repayment of the $ 300.0 million term loan ( $ 6.0 million ) . these improvements in operating cash flow were partially offset by higher cash used in days sales outstanding , or dso ( $ 74.1 million ) . this higher cash used reflected a five-day increase in dso in 2013. the net impact on cash from the increase in dso resulted from the fact that we have continued to experience a trend toward longer payment terms on our contracts . dso can shift significantly at each reporting period depending on the timing of cash receipts under contractual payment terms relative to the recognition of revenue over a project lifecycle .
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we are currently conducting a phase 2 clinical trial of vk2809 in approximately 60 patients with hypercholesterolemia and fatty liver disease and expect to report initial results from this phase 2 clinical trial in the second half of 2018. in october 2017 , we announced positive final results from an eight-week study of vk2809 in an in vivo model of non-alcoholic steatohepatitis , or nash . treatment with vk2809 resulted in : ( 1 ) statistically significant reductions in several key measures of steatosis , including liver triglyceride content and total liver lipid content , ( 2 ) fibrotic activity , including total liver fibrosis , type i collagen and hydroxyproline , relative to vehicle controls , and ( 3 ) statistically significant changes in the expression of key genes associated with nash development and progression , relative to vehicle control , suggesting improved lipid and cholesterol metabolism , improved lipid metabolism and insulin sensitivity and reduced fibrotic activity . in february 2017 , we announced that we are commencing efforts to utilize vk2809 to potentially help patients who suffer from glycogen storage disease type ia , or gsd ia . gsd ia is a rare , orphan genetic disease caused by a deficiency of glucose-6-phosphatase , or g6pc , an enzyme responsible for the liver 's production of free glucose from glycogen and gluconeogenesis . approximately 2,000 patients in the u.s. suffer from gsd ia . we have conducted a proof-of-concept study utilizing vk2809 in an in vivo model of gsd ia . data demonstrated that treatment with vk2809 led to statistically significant reductions in key metabolic markers of gsd ia . vk2809 's potential to rapidly reduce hepatic triglyceride levels , as demonstrated in this initial evaluation in a gsd ia model , provides support for the continued investigation of the compound in this indication . we 62 expect to initiate a phase 1 human proof-of-concept clinical trial to evaluate vk2809 in patients with gsd ia in the first half of 2018. we are also developing vk0214 for x-linked adrenoleukodystrophy , or x-ald , a rare x-linked , inherited neurological disorder characterized by a breakdown in the protective barriers surrounding brain and nerve cells . the disease , for which there is no approved treatment , is caused by mutations in a peroxisomal transporter of very long chain fatty acids , or vlcfa , known as abcd1 . as a result , transporter function is impaired and patients are unable to efficiently metabolize vlcfa . the trß receptor is known to regulate expression of an alternative vlcfa transporter , known as abcd2 . various preclinical models have demonstrated that increased expression of abcd2 can lead to normalization of vlcfa metabolism . preliminary data suggest that vk0214 stimulates abcd2 expression in an in vitro model and reduces vlcfa levels in an in vivo model of x-ald . pending completion of certain toxicology studies , we expect to file an ind to conduct a proof-of-concept study in patients with x-ald in the in the second half of 2018. we were incorporated under the laws of the state of delaware on september 24 , 2012. since our incorporation , we have devoted most of our efforts towards conducting certain clinical trials and preclinical studies related to our vk5211 , vk2809 and vk0214 programs , as well as efforts towards raising capital and building infrastructure . we obtained exclusive worldwide rights to our vk5211 , vk2809 and vk0214 programs and certain other assets pursuant to an exclusive license agreement with ligand pharmaceuticals incorporated , or ligand . the terms of this license agreement are detailed in the master license agreement which we entered into on may 21 , 2014 with ligand , as amended , or the master license agreement . a summary of the master license agreement can be found under the heading “ agreements with ligand— master license agreement ” under part i , “ item 1. business ” of this annual report on form 10-k. financial operations overview revenues to date , we have not generated any revenue . we do not expect to receive any revenue from any drug candidates that we develop unless and until we obtain regulatory approval for , and commercialize , our drug candidates or enter into collaborative agreements with third parties . research and development expenses during the year ended december 31 , 2016 , we charged $ 9,000,499 to research and development expense related to our efforts to conduct phase 2 clinical trials for vk5211 and vk2809 and in vivo studies for vk0214 . during the year ended december 31 , 2017 , we charged $ 13,741,186 to research and development expense related to our continued efforts to conduct phase 2 clinical trials for vk5211 and vk2809 and in vivo studies for vk0214 . we expect that our ongoing research and development expenses will consist of costs incurred for the development of our drug candidates , including , but not limited to : employee and consultant-related expenses , which will include salaries , benefits and stock-based compensation , and certain consultant fees and travel expenses ; expenses incurred under agreements with investigative sites and contract research organizations , or cros , which will conduct a substantial portion of our research and development activities on our behalf ; payments to third-party manufacturers , which will produce our active pharmaceutical ingredients and finished products ; license fees paid to third parties for use of their intellectual property ; and facilities , depreciation and other allocated expenses , which will include direct and allocated expenses for rent and maintenance of facilities and equipment , depreciation of leasehold improvements , equipment and laboratory and other supplies . we expense all research and development costs as incurred . the process of conducting the necessary clinical research to obtain regulatory approval is costly and time consuming and the successful development of our drug candidates is highly uncertain . story_separator_special_tag results of operations comparison of the years ended december 31 , 2017 and 2016 research and development expenses the following table summarizes our research and development expenses for the years ended december 31 , 2017 and 2016. year ended december 31 , $ change % change 2017 2016 research and development expenses $ 13,741,186 $ 9,000,499 $ 4,740,687 52.7 % the increase in research and development expenses during the year ended december 31 , 2017 as compared to the year ended december 31 , 2016 was primarily due to an increase in expenses of $ 3,672,401 related to clinical trial activity for our vk5211 and vk2809 programs and pre-clinical efforts for our vk0214 program , $ 676,588 related primarily to manufacturing for our drug candidates and $ 327,677 related to services provided by third party consultants , offset by a decrease in expenses of $ 128,629 related to stock based compensation expense . general and administrative expenses the following table summarizes our general and administrative expenses for the years ended december 31 , 2017 and 2016. year ended december 31 , $ change % change 2017 2016 general and administrative expenses $ 5,329,003 $ 4,846,776 $ 482,227 9.9 % the increase in general and administrative expenses during the year ended december 31 , 2017 as compared to the year ended december 31 , 2016 was primarily due to increases in salaries and benefits related expenses of $ 662,605 , consultant expenses of $ 53,479 , franchise taxes of $ 40,627 and patent expenses of $ 35,916 , offset by decreases in stock-based compensation expense of $ 214,233 and legal expenses of $ 142,042. other income ( expense ) the following table summarizes our other income ( expense ) for the years ended december 31 , 2017 and 2016. year ended december 31 , $ change % change 2017 2016 other income ( expense ) $ ( 1,507,476 ) $ ( 884,547 ) $ ( 622,929 ) 70.4 % other income ( expense ) recognized during the year ended december 31 , 2017 consisted primarily of expenses of $ 571,044 related to the amortization of financing costs , $ 1,282,631 related to the amortization of the ligand note discount and $ 96,872 of interest expenses related to the ligand note offset by income of $ 344,928 related to the change in fair value of the ligand note 's conversion feature and $ 98,142 of interest income related to our short-term investments . other income ( expense ) recognized during the year ended december 31 , 2016 consisted primarily of expenses of $ 1,788,088 related to the amortization of the ligand note discount , $ 105,551 of interest expenses related to the ligand note and $ 138,701 of amortization expenses related to the equity distribution agreement , dated june 20 , 2016 , or the distribution agreement , with maxim group llc , or maxim , and the common stock purchase agreement , or the purchase agreement , with aspire capital fund , llc , or aspire capital , offset by income of $ 1,064,170 related to the change in fair value of the ligand note 's conversion feature . story_separator_special_tag roman ; font-size:10pt ; font-weight : normal ; font-style : normal ; text-transform : none ; font-variant : normal ; `` > 68 purchases as set forth in the commitment purchase agreement . in addition to regular purchases , as described above , we may also direct lpc to purchase additional amounts as accelerated purchases or as additional purchases if the closing sale price of the common stock is not below certain threshold prices , as set forth in the commitment purchase agreement . in all instances , we may not sell shares of its common stock to lpc under the commitment purchase agreement if it would result in lpc beneficially owning more than 4.99 % of the common stock . as consideration for lpc 's commitment to purchase shares of common stock pursuant to the commitment purchase agreement , we issued to lpc 100,000 shares of common stock . during the fourth quarter of 2017 , we sold to lpc in accordance with the terms of the agreement 343,051 shares of our common stock for aggregate proceeds of $ 802,112. on december 11 , 2017 , we closed an underwritten public offering of 5,900,000 shares of our common stock , including 769,565 shares sold pursuant to the underwriter 's full exercise of their option to purchase additional shares to cover over-allotments , at a public offering price of $ 2.50 per share , for total net proceeds of $ 13,449,252 after deducting underwriting discounts and commissions and estimated offering expenses payable by us . the following table summarizes our cash flows for the periods indicated below : replace_table_token_4_th cash used in operating activities during the year ended december 31 , 2017 , cash used in operating activities of $ 14,757,767 primarily reflected our net losses for the period , offset by non-cash charges such as amortization of discount charged to interest expense on the ligand note , amortization of investment premiums , amortization of financing costs , stock-based compensation and changes in our working capital accounts , primarily consisting of an increase in accrued expenses , accounts payable offset by a decrease in the fair value of the debt conversion feature liability for the ligand note and a decrease in prepaid expenses . during the year ended december 31 , 2016 , cash used in operating activities of $ 11,071,263 primarily reflected our net losses for the period , offset by non-cash charges such as amortization of discount charged to interest expense on the ligand note , amortization of investment premiums , amortization of financing costs , stock-based compensation and changes in our working capital accounts , primarily consisting of an increase in accrued expenses offset by a decrease in the fair value of the debt conversion feature liability for the ligand note and a decrease in accounts payable and
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources we have incurred losses and negative cash flows from operations and have not generated any revenues since our inception . as of december 31 , 2017 , we had cash , cash equivalents and short term investments of $ 20,575,956. in addition , in february 2018 we raised an additional $ 63,250,000 in gross proceeds through a public offering of 12,650,000 shares of our common stock at $ 5.00 per share . as such , we believe our cash , cash equivalents and short-term investments , including the proceeds received in february 2018 , 67 will be sufficient to fund our operations through at least the first quarter of 2019 , which is more than one year after the date our december 31 , 2017 financial statements were issued . our primary use of cash is to fund operating expenses , which to date have consisted of the cost to obtain the license of intellectual property from ligand , certain research and development expenses related to furthering the development of vk5211 , vk2809 and vk0214 efforts and general and administrative expenses . since we have not generated any revenues to date , we have incurred operating losses since our inception . cash used to fund operating expenses is impacted by the timing of payment of these expenses , as reflected in the change in our outstanding accounts payable and accrued expenses . on june 20 , 2016 , we entered into the distribution agreement with maxim , pursuant to which we were able to offer and sell , from time to time , through maxim , up to 3,748,726 shares of our common stock . effective july 26 , 2017 , the distribution agreement terminated automatically in accordance with the terms thereof . all shares of our common stock offered and sold pursuant to the distribution agreement were issued pursuant to our registration statement on form s-3 ( file no . 333-212134 ) filed with the sec on june 20 , 2016 and the prospectus relating to shares issued pursuant to the distribution agreement that forms a part of the registration statement on form s-3 .
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the company considers many factors , including the severity and duration of the impairment ; the intent and ability of the company to hold the equity security for a period of time sufficient for a recovery in value ; recent events specific to the issuer or industry ; and for debt securities , the intent to sell the security , the likelihood to be required to sell the security before it recovers the entire amortized cost , external credit ratings and recent downgrades . the company is required to record other-than-temporary impairment charges through earnings , if it has the intent to sell , or will more likely than not be required to sell an impaired debt security before a recovery of its amortized cost basis . in addition , the company is required to record other-than-temporary impairment charges through earnings for the amount of credit losses , regardless of the intent or requirement to sell . credit loss is measured as the difference between the present value of an impaired debt security 's cash flows and its amortized cost basis . non-credit related write-downs to fair value must be recorded as decreases to accumulated other comprehensive income as long as the company has no intent or requirement to sell an impaired security before a recovery of amortized cost basis . 25 index management of credit risk management considers credit risk to be an important risk factor affecting the financial condition and operating results of greene county bancorp , inc. the potential for loss associated with this risk factor is managed through a combination of policies approved by greene county bancorp , inc. 's board of directors , the monitoring of compliance with these policies , and the periodic reporting and evaluation of loans with problem characteristics . policies relate to the maximum amount that can be granted to a single borrower and such borrower 's related interests , the aggregate amount of loans outstanding by type in relation to total assets and capital , loan concentrations , loan-to-collateral value ratios , approval limits and other underwriting criteria . policies also exist with respect to the rating of loans , determination of when loans should be placed on a nonperforming status and the factors to be considered in establishing greene county bancorp , inc. 's allowance for loan losses . management also considers credit risk when evaluating potential and current holdings of securities . credit risk is a critical component in evaluating corporate debt securities . greene county bancorp , inc. has purchased municipal securities as part of its strategy based on the fact that such securities can offer a higher tax-equivalent yield than other similar investments . management of interest rate risk while greene county bancorp , inc. 's loan portfolio is subject to risks associated with the local economy , greene county bancorp , inc. 's most significant form of market risk is interest rate risk because most of greene county bancorp , inc. 's assets and liabilities are sensitive to changes in interest rates . greene county bancorp , inc. 's assets consist primarily of mortgage loans , which have longer maturities than greene county bancorp , inc. 's liabilities , which consist primarily of deposits . greene county bancorp , inc. does not engage in any derivative-based hedging transactions , such as interest rate swaps and caps . due to the complex nature and additional risk often associated with derivative hedging transactions , such as counterparty risk , it is greene county bancorp , inc. 's policy to continue its strategy of mitigating interest rate risk through balance sheet composition . greene county bancorp , inc. 's interest rate risk management program focuses primarily on evaluating and managing the composition of greene county bancorp , inc. 's assets and liabilities in the context of various interest rate scenarios . tools used to evaluate and manage interest rate risk include measuring net interest income sensitivity ( “ nii ” ) , economic value of equity ( “ eve ” ) sensitivity and gap analysis . these standard interest rate risk measures are described more fully below . factors beyond management 's control , such as market interest rates and competition , also have an impact on interest income and interest expense . in recent years , greene county bancorp , inc. has followed the following strategies to manage interest rate risk : ( i ) maintaining a high level of liquid interest earning assets such as short-term interest-earning deposits and various investment securities ; ( ii ) maintaining a high concentration of less interest-rate sensitive and lower-costing core deposits ; ( iii ) originating consumer installment loans that have up to five-year terms but that have significantly shorter average lives due to early prepayments ; ( iv ) originating adjustable-rate nonresidential mortgage loans and commercial loans ; and ( v ) where possible , matching the funding requirements for fixed-rate residential mortgages with lower-costing core deposits . by investing in liquid securities , which can be sold to take advantage of interest rate shifts , and originating adjustable rate nonresidential and commercial loans with shorter average durations , greene county bancorp , inc. believes it is better positioned to react to changes in market interest rates . investments in short-term securities , however , generally bear lower yields than longer-term investments . thus , these strategies may result in lower levels of interest income than would be obtained by investing in longer-term fixed-rate investments . net interest income analysis . one of the most significant measures of interest risk is net interest income sensitivity ( “ nii ” ) . nii is the measurement of the sensitivity of greene county bancorp , inc. 's net interest income to changes in interest rates and is computed for instantaneous rate shocks and a series of rate ramp assumptions . story_separator_special_tag such ratings coincide with the `` substandard `` , `` doubtful `` and `` loss `` classifications used by federal regulators in their examination of financial institutions . assets that do not currently expose the insured financial institutions to sufficient risk to warrant classification in one of the aforementioned categories but otherwise possess weaknesses are designated `` special mention . `` for further discussion regarding how management determines when a loan should be classified see part ii , item 8 financial statements and supplemental data , note 4 , loans of this report . at june 30 , 2014 , the bank of greene county had $ 7.7 million of loans classified as substandard , and $ 2.3 million of loans designated as special mention . no loans were classified as either doubtful or loss at june 30 , 2014. nonaccrual loans and nonperforming assets loans are reviewed on a regular basis to assess collectability of all principal and interest payments due . management determines that a loan is impaired or non-performing when it is probable at least a portion of the principal or interest will not be collected in accordance with contractual terms of the note . when a loan is determined to be impaired , the measurement of the loan is based on present value of estimated future cash flows , except that all collateral-dependent loans are measured for impairment based on the fair value of the collateral . generally , management places loans on nonaccrual status once the loans have become 90 days or more delinquent or sooner if there is a significant reason for management to believe the collectability is questionable and , therefore , interest on the loan will no longer be recognized on an accrual basis . the company identifies impaired loans and measures the impairment in accordance with fasb asc subtopic “ receivables – loan impairment . ” management may consider a loan impaired once it is classified as nonaccrual and when it is probable that the borrower will be unable to repay the loan according to the original contractual terms of the loan agreement or the loan is restructured in a troubled debt restructuring . it should be noted that management does not evaluate all loans individually for impairment . generally , the bank of greene county considers residential mortgages , home equity loans and installment loans as small , homogeneous loans , which are evaluated for impairment collectively based on historical loan experience and other factors . in contrast , large commercial mortgage , construction , multi-family , business loans and select larger balance residential mortgage loans are viewed individually and considered impaired if it is probable that the bank of greene county will not be able to collect scheduled payments of principal and interest when due , according to the contractual terms of the loan agreement . the measurement of impaired loans is generally based on the fair value of the underlying collateral . the majority of the bank of greene county loans , including most nonaccrual loans , are small homogenous loan types adequately supported by collateral . management considers the payment status of loans in the process of evaluating the adequacy of the allowance for loan losses among other factors . loans that are either delinquent a minimum of 60 days or are on nonaccrual status , and are not individually considered impaired , are either designated as special mention or substandard , and the allocation of the allowance for loan loss is based upon the risk associated with such designation . for further discussion and detail regarding the allowance for loan losses and impaired loans please refer to part ii , item 8 financial statements and supplemental data , note 4 loans of this report . a loan does not have to be 90 days delinquent in order to be classified as nonperforming . foreclosed real estate is considered to be a nonperforming asset . 31 index analysis of nonaccrual loans , nonperforming assets and restructured loans the table below details additional information related to nonaccrual loans for the periods indicated : replace_table_token_9_th the table below details additional information related to nonaccrual loans as of june 30 : replace_table_token_10_th the company identifies impaired loans and measures the impairment in accordance with fasb asc subtopic “ receivables – loan impairment ” . a loan is considered impaired when it is probable that the borrower will be unable to repay the loan according to the original contractual terms of the loan agreement or the loan is restructured in a troubled debt restructuring . 32 index the table below details additional information on impaired loans as of the dates indicated : replace_table_token_11_th nonperforming assets amounted to $ 6.6 million at june 30 , 2014 and $ 7.2 million at june 30 , 2013 , a decrease of $ 543,000 , or 7.6 % , and total impaired loans amounted to $ 6.8 million at june 30 , 2014 compared to $ 7.7 million at june 30 , 2013 , a decrease of $ 848,000 , or 11.0 % . loans on nonaccrual status totaled $ 5.9 million at june 30 , 2014 of which $ 3.0 million were in the process of foreclosure . included in nonaccrual loans were $ 922,000 of loans which were less than 90 days past due at june 30 , 2014 , but have a recent history of delinquency greater than 90 days past due . these loans will be returned to accrual status once they have demonstrated a history of timely payments . included in total loans past due were $ 925,000 of loans which were making payments pursuant to forbearance agreements . under the forbearance agreements , the customers have made arrangements with the bank of greene county to bring the loans current over a specified period of time ( resulting in an insignificant delay in repayment ) . during this term of the forbearance agreement , the bank of greene county has
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources greene county bancorp , inc. 's primary sources of funds are deposits and proceeds from principal and interest payments on loans and securities , as well as lines of credit and term borrowing facilities available through the federal home loan bank as needed . while maturities and scheduled amortization of loans and securities are predictable sources of funds , deposit outflows , mortgage prepayments , and borrowings are greatly influenced by general interest rates , economic conditions and competition . greene county bancorp , inc. 's primary investing activities are the origination of residential one- to four-family and nonresidential mortgage loans , other consumer and commercial loans , and the purchase of securities . loan originations exceeded repayments by $ 42.4 million and $ 35.2 million and purchases of securities totaled $ 39.0 million and $ 84.3 million for the years ended june 30 , 2014 and 2013 , respectively . these activities were funded primarily through deposit growth , and principal payments on loans and securities . loan sales did not provide an additional source of liquidity during the years ended june 30 , 2014 and 2013 , as greene county bancorp , inc. originated loans for retention in its portfolio . 40 index greene county bancorp , inc. experienced a net increase in total deposits of $ 31.2 million and $ 46.5 million for the years ended june 30 , 2014 and 2013 , respectively . the level of interest rates and products offered by local competitors are some factors affecting deposit flows . the company continues to benefit from consolidation of other depository institutions within its market area and has successfully launched several marketing campaigns aimed at different segments of the market . greene county bancorp , inc. monitors its liquidity position on a daily basis .
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strong cash flow generation is critical to the future success of the company , not only to support the general operating needs of the company , but also to fund capital expenditures related to its store network , distribution and administrative facilities , costs associated with continued improvement of information technology tools , costs associated with potential strategic acquisitions that may arise from time to time and shareholder return initiatives , including cash dividends and share repurchases . quality of merchandise offerings to monitor and maintain acceptance of its merchandise offerings , the company monitors sell-throughs , inventory turns , gross margins and markdown rates on a department and style level . this analysis helps the company manage inventory levels to reduce cash flow requirements and deliver optimal gross margins by improving merchandise flow and establishing appropriate price points to minimize markdowns . store productivity to assess store-level performance , the company monitors various indicators , including new store productivity , sales per square foot , store operating contribution margin and store cash flow . new store productivity compares the sales increase for all stores not included in the same store sales calculation with the increase in square footage . executive summary net income for the year ended january 28 , 2012 increased 45 % to $ 263.9 million , or $ 2.10 per diluted share , as compared to net income of $ 182.1 million , or $ 1.50 per diluted share , in fiscal 2010. fiscal 2011 net income included a gain on sale of investment of $ 8.7 million , net of tax , or $ 0.07 per diluted share and an increase to net income of $ 1.3 million , net of tax , or $ 0.01 per diluted share , resulting from a partial reversal of litigation settlement costs previously accrued during fiscal 2010. fiscal 2010 net income included expenses relating to future lease payments and asset impairment charges resulting from the closure of 12 underperforming golf galaxy stores 31 of approximately $ 9.8 million , net of tax , or $ 0.08 per diluted share and a litigation settlement charge of approximately $ 6.5 million , net of tax , or $ 0.05 per diluted share . net sales increased 7 % to $ 5,211.8 million in fiscal 2011 from $ 4,871.5 million in fiscal 2010 due primarily to a 2.0 % increase in consolidated same store sales and the growth of our store network . gross profit increased to 30.60 % in fiscal 2011 as a percentage of net sales from 29.75 % in fiscal 2010 due primarily to higher merchandise margins and leverage of fixed occupancy costs . in fiscal 2011 , the company : declared an annual cash dividend of $ 0.50 per share , the first ever such dividend . executed a new credit agreement that increases the company 's borrowing capacity to $ 500 million and allows for a $ 250 million increase in the total capacity , subject to the satisfaction of certain conditions . authorized a one-year share repurchase program of up to $ 200 million of the company 's common stock . pursuant to this program , the company repurchased 30,600 shares of common stock for $ 1.2 million in fiscal 2011. began construction on a fourth distribution center , which we expect will increase the company 's total distribution capacity to approximately 750 stores . results of operations the following table presents for the periods indicated selected items in the consolidated statements of income as a percentage of the company 's net sales , as well as the basis point change in percentage of net sales from the prior year : replace_table_token_8_th ( 1 ) revenue from retail sales is recognized at the point of sale , net of sales tax . revenue from e-commerce sales is recognized upon shipment of merchandise and any service-related revenue is recognized as the services are 32 performed . a provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded . revenue from gift cards and returned merchandise credits ( collectively the `` cards `` ) are deferred and recognized upon the redemption of the cards . these cards have no expiration date . income from unredeemed cards is recognized on the consolidated statements of income within selling , general and administrative expenses at the point at which redemption becomes remote . the company performs an evaluation of the aging of the unredeemed cards , based on the elapsed time from the date of original issuance , to determine when redemption becomes remote . ( 2 ) cost of goods sold includes the cost of merchandise , inventory shrinkage and obsolescence , freight , distribution and store occupancy costs . store occupancy costs include rent , common area maintenance charges , real estate and other asset-based taxes , store maintenance , utilities , depreciation , fixture lease expenses and certain insurance expenses . ( 3 ) selling , general and administrative expenses include store and field support payroll and fringe benefits , advertising , bank card charges , information systems , marketing , legal , accounting , other store expenses and all expenses associated with operating the company 's corporate headquarters . selling , general and administrative expenses for fiscal 2010 include expenses relating to future lease obligations and asset impairment charges resulting from the closure of 12 underperforming golf galaxy stores as well as a litigation settlement charge . fiscal 2011 includes an expense reduction relating to the partial reversal of previously accrued litigation settlement costs . ( 4 ) merger and integration costs primarily include duplicative administrative costs and management , advertising and severance expenses associated with the conversions from chick 's sporting goods ( `` chick 's `` ) stores to dick 's stores . story_separator_special_tag critical accounting policies are those that the company believes are both most important to the portrayal of the company 's financial condition and results of operations , and require the company 's most difficult , subjective or complex judgments , often as a result of the need to make estimates about the effect of matters that are inherently uncertain . judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using different assumptions . the company considers the following policies to be the most critical in understanding the judgments that are involved in preparing its consolidated financial statements . inventory valuation the company values inventory using the lower of weighted average cost or market method . market price is generally based on the current selling price of the merchandise . the company regularly reviews inventories to determine if the carrying value of the inventory exceeds market value and the company records a reserve to reduce the carrying value to its market price , as necessary . historically , the company has rarely experienced significant occurrences of obsolescence or slow moving inventory . however , future changes , such as customer merchandise preference , unseasonable weather patterns , economic conditions or business trends could cause the company 's inventory to be exposed to obsolescence or slow moving merchandise . shrink expense is accrued as a percentage of merchandise sales based on historical shrink trends . the company performs physical inventories at the stores and distribution centers throughout the year . the reserve for shrink represents an estimate for shrink for each of the company 's locations since the last physical inventory date through the reporting date . estimates by location and in the aggregate are impacted by internal and external factors and may vary significantly from actual results . vendor allowances vendor allowances include allowances , rebates and cooperative advertising funds received from vendors . these funds are determined for each fiscal year and the majority are based on various quantitative contract terms . amounts expected to be received from vendors relating to the purchase of merchandise inventories are treated as a reduction of inventory and reduce cost of goods sold as the merchandise is 40 sold . amounts that represent a reimbursement of costs incurred , such as advertising , are recorded as a reduction to the related expense in the period that the related expense is incurred . the company records an estimate of earned allowances based on the latest projected purchase volumes and advertising forecasts . on an annual basis at the end of the year , the company confirms earned allowances with vendors to ensure the amounts are recorded in accordance with the terms of the contract . business combinations in accounting for business combinations , we allocate the purchase price of an acquired business to its identifiable assets and liabilities based on estimated fair values and the excess of the purchase price over the amount allocated to the assets and liabilities , if any , is recorded as goodwill . the determination of fair value involves the use of estimates and assumptions which we believe provides a reasonable basis for determining fair value . we may engage outside appraisal firms to assist in the fair value determination of inventory , identifiable intangible assets such as trade names , and any other significant assets or liabilities . goodwill and intangible assets goodwill , indefinite-lived and other finite-lived intangible assets are tested for impairment on an annual basis . additional impairment assessments may be performed on an interim basis if the company deems it necessary . our evaluation for impairment requires accounting judgments and financial estimates in determining the fair value of the reporting unit . if these judgments or estimates change in the future , we may be required to record impairment charges for these assets . the goodwill impairment test is a two-step impairment test . in the first step , the company compares the fair value of each reporting unit to its carrying value . the company determines the fair value of its reporting units using a combination of a discounted cash flow and a market value approach . the company 's estimates may differ from actual results due to , among other things , economic conditions , changes to its business models , or changes in operating performance . significant differences between these estimates and actual results could result in future impairment charges and could materially affect the company 's future financial results . if the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that reporting unit , goodwill is not impaired and the company is not required to perform further testing . if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit , then the company must perform the second step in order to determine the implied fair value of the reporting unit 's goodwill and compare it to the carrying value of the reporting unit 's goodwill . the activities in the second step include valuing the tangible and intangible assets and liabilities of the impaired reporting unit based on their fair value and determining the fair value of the impaired reporting unit 's goodwill based upon the residual of the aggregate identified tangible and intangible assets and liabilities . intangible assets that have been determined to have indefinite lives are also not subject to amortization and are reviewed at least annually for potential impairment , or more frequently as mentioned above . the fair value of the company 's intangible assets are estimated and compared to their carrying value . the company estimates the fair value of these intangible assets based on an income approach using the relief-from-royalty method . this methodology assumes that , in lieu of ownership , a third party would be willing to pay a royalty in
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources overview the company 's liquidity and capital needs have generally been met by cash from operating activities and borrowings under a revolving credit facility . net cash provided by operating activities for fiscal 2011 was $ 410.4 million compared to $ 390.0 million for fiscal 2010. during fiscal 2011 and fiscal 2010 , apart from letters of credit , the company did not borrow amounts under its current or prior credit facility . net cash from operating , investing and financing activities are discussed further below . on december 5 , 2011 , the company entered into a five-year credit agreement with wells fargo bank , national association ( the `` credit agreement '' ) which replaced the company 's then existing credit facility that was terminated . the credit agreement provides for a $ 500 million revolving credit facility , including up to $ 100 million in the form of letters of credit and allows the company , subject to the satisfaction of certain conditions , to request an increase of up to $ 250 million in borrowing availability to the extent that existing or new lenders agree to provide such additional revolving commitments . 36 the credit agreement , which matures on december 5 , 2016 , is secured by a first priority security interest in certain property and assets , including receivables , inventory , deposit accounts and other personal property of the company and is guaranteed by the company 's domestic subsidiaries . the interest rates per annum applicable to loans under the credit agreement will be , at the company 's option , equal to a base rate or an adjusted libo rate plus an applicable margin percentage . the applicable margin percentage for base rate loans is 0.20 % to 0.50 % and for adjusted libo rate loans is 1.20 % to 1.50 % , depending on the borrowing availability of the company .
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net sales and operating results have historically been lowest in the three month periods ending december 31 and march 31 when the northern united states and all of canada generally experience weather that significantly restricts construction activity . a significant portion of our net sales is directly related to residential construction , municipal water infrastructure and non-residential construction activity in the united states . various external sources forecast annualized housing starts increase 12 % to 40 % in calendar 2010 compared to calendar 2009. we expect our related sales to lag any recovery in the residential construction market . in addition , we believe municipal water infrastructure spending could be influenced by an increase in demand in the second half of fiscal 2010 primarily driven by stimulus spending . we also expect non-residential construction to decrease in fiscal 2010 as a result of a slowdown in general economic activity . independent forecasts of calendar 2010 non-residential construction activity indicate a decline of 16 % compared to calendar 2009. as a result , most of our manufacturing facilities are operating significantly below their optimal capacities . since the end of fiscal 2008 , we have reduced headcount , consolidated facilities , reduced operating days and reduced overall spending activities in response to lower demand for our products . during the third and fourth quarters of fiscal 2009 , however , we increased production at mueller co. and u.s. pipe compared to the second quarter due to a seasonal uptick in demand . we continually monitor our production activities in response to evolving business conditions and expect to take additional steps to improve inventory turns . restructuring actions at u.s. pipe 's north birmingham facility resulted in lower fixed costs , reduced capacity and a $ 38.5 million non-cash restructuring charge , primarily for impairment of property , plant and equipment , during the year ended september 30 , 2009. in addition to reduced demand in water infrastructure markets , we believe our distributors have also reduced their inventory levels in response to current economic conditions . we expect our distributors to maintain lower inventory levels for the near future . we test our goodwill and other noncurrent assets for possible impairment at least annually as of september 1 and more frequently in the event that certain conditions exist indicating impairment may have occurred . the testing is a two-step process . step 1 compares the fair value of a reporting unit to its carrying value . we have identified each of our segments as a reporting unit . step 2 is a more detailed analysis of the fair value of each reporting unit 's individual assets and liabilities and is performed if step 1 indicates possible impairment . our step 1 testing as of september 1 , 2008 did not indicate possible impairment . subsequent to september 1 , 2008 , equity markets in the united states and our stock market capitalization in particular decreased significantly . we considered these decreases as such a condition to perform interim impairment testing . our valuation for the company was based on a combination of our estimate of our future cash flows and the market comparable valuations of similar companies . our estimate of future cash flows extends a number of years into the future . these estimates are complex , subjective and uncertain and reflect our estimate of the business conditions in the future , over which we may have very little control . choosing an appropriate discount rate to apply to these estimated cash flows is also complex and subjective . we use our estimated future cash flows as the best information of future cash flows available to our investors . we use the market comparable valuations as a reasonable method to value the risks investors perceive in companies like ours . we weight our cash flow estimates at least as heavily as the market comparable data . at december 31 , 2008 , our step 1 testing indicated possible impairment so we proceeded to step 2 testing . 32 index to financial statements at december 31 , 2008 , we reported estimated goodwill impairment charges of $ 59.5 million for u.s. pipe , completely impairing its goodwill , and $ 340.5 million against mueller co. 's prior goodwill balance of $ 718.4 million , subject to additional fair value analysis . any additional impairment charge was not expected to exceed $ 200 million . during the three months ended march 31 , 2009 , however , our common stock began trading at prices significantly lower than prior periods , especially beginning in february . our lower market capitalization prompted us to perform a second interim impairment assessment at march 31 , 2009. this testing led to the conclusion that all of our remaining goodwill was fully impaired . during the three months ended march 31 , 2009 , we recorded additional goodwill impairment charges of $ 376.8 million for mueller co. and $ 92.7 million for anvil . in conjunction with the testing of goodwill for impairment , we also compared the estimated fair values of our identified other intangible assets to their respective carrying values and determined that the carrying amount of trademarks and trade names at mueller co. had been impaired . at march 31 , 2009 , we recorded an impairment charge against these assets of $ 101.4 million . mueller co. 's trademarks and trade names have a remaining carrying value of $ 263.0 million at september 30 , 2009. a significant portion of our pension plan assets is invested in equity securities . the overall deterioration of u.s. and international equity markets in the latter part of 2008 and early 2009 caused the fair market value of these assets to decline . story_separator_special_tag there was no goodwill at september 30 , 2009 compared to $ 871.5 million at september 30 , 2008. we deemed goodwill was impaired and wrote it off during the year ended september 30 , 2009. identifiable intangible assets were $ 663.6 million at september 30 , 2009 compared to $ 789.8 million at september 30 , 2008. finite-lived intangible assets , $ 363.3 million of net book value at september 30 , 2009 , are 41 index to financial statements amortized over their estimated useful lives . such amortization expense was $ 30.7 million during fiscal 2009 and is expected to be a similar amount for each of the next five years . indefinite-lived identifiable intangible assets , $ 300.3 million at september 30 , 2009 , are not amortized , but tested at least annually for possible impairment . we concluded from an interim review during fiscal 2009 that the carrying amount of indefinite-lived identifiable intangible assets had been impaired by $ 101.4 million . we concluded from our annual review at september 1 , 2009 that no other impairments had occurred . we also concluded that no events occurred during fiscal 2009 requiring testing for possible additional impairment at any date subsequent to march 31 , 2009. accounts payable and other current liabilities were $ 209.1 million at september 30 , 2009 compared to $ 285.0 million at september 30 , 2008. compared to quarterly spending activity , these amounts represented approximately 60 days of purchases at september 30 , 2009 compared to approximately 56 days of purchases at september 30 , 2008 , each of which is consistent with recent historical trends . payment patterns for various purchases vary significantly , ranging from payroll which is paid very frequently to incentive compensation and customer rebates that might only be paid once per year . outstanding borrowings were $ 740.2 million at september 30 , 2009 compared to $ 1,095.5 million at september 30 , 2008. the decrease of $ 355.3 million during fiscal 2009 was due primarily to prepayments of $ 125 million of borrowings under the amended 2007 credit agreement in june 2009 , $ 50 million in august 2009 and $ 168 million in september 2009. principal payments due during fiscal 2010 are $ 11.7 million . deferred income taxes were net liabilities of $ 149.2 million at september 30 , 2009 compared to net liabilities of $ 247.6 million at september 30 , 2008. deferred tax liabilities related to property , plant and equipment , goodwill and identifiable intangible assets were $ 251.1 million and $ 322.2 million at september 30 , 2009 and 2008 , respectively . liquidity and capital resources we had cash and cash equivalents of $ 61.5 million and $ 154.7 million of unused capacity under the revolving credit facility component of our amended 2007 credit agreement at september 30 , 2009. the borrowing capacity of the revolving credit facility is subject to the financial covenants under the amended 2007 credit agreement . cash flows from operating activities are categorized below . replace_table_token_12_th collections of receivables were lower during the year ended september 30 , 2009 compared to the prior year primarily due to lower year over year shipment volumes . reduced disbursements , other than interest and income taxes , during the year ended september 30 , 2009 reflect timing differences and lower volumes of material , labor and overhead purchased . capital expenditures 42 index to financial statements were $ 39.7 million during the year ended september 30 , 2009 compared to $ 88.1 million for fiscal 2008. in addition to these capital expenditures , mueller co. purchased data collection-related technology associated with its hersey meters products for $ 8.7 million . we divested certain assets of anvil 's non-core electrical fittings and couplings business in november 2009. we received $ 12.8 million cash and certain assets of seminole tubular company , which complement our existing mechanical pipe nipple business . we believe this transaction will generate cash and enhance our overall product offerings . a significant portion of the assets invested in our defined benefit pension plans is invested in equity securities . equity markets generally have been very volatile during the period between september 30 , 2008 and september 30 , 2009. an analysis of the funded status of our u.s. pension plans will be performed as of january 1 , 2010 for purposes of determining funding thresholds under provisions of the pension protection act . if equity markets continue to perform poorly , we will lower our estimated rate of return on these assets , which will cause pension expense to increase and require higher levels of company contributions to these plans . changes in pension expense and contribution requirements may be spread over many years . pension contributions were approximately $ 24.0 million during the year ended september 30 , 2009 and we currently estimate contributing approximately $ 23 million to $ 25 million to our u.s. pension plans during fiscal 2010. we anticipate that our existing cash , cash equivalents and borrowing capacity combined with our expected operating cash flows will be sufficient to meet our anticipated operating expenses , capital expenditures , pension contributions and scheduled debt service obligations as they become due for at least the next twelve months . however , our ability to make scheduled payments of principal , to pay interest or to refinance our debt and to satisfy our other debt obligations will depend upon our future operating performance , which will be affected by general economic , financial , competitive , legislative , regulatory , business and other factors beyond our control . 2007 credit agreement the amended 2007 credit agreement includes term loan a , term loan b and a revolving credit facility . borrowings under the amended 2007 credit agreement bear interest at a floating rate equal to libor plus a margin ranging from 500 to 600 basis points depending on our consolidated
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | loss on early extinguishment of debt . loss on early extinguishment of debt was from the company retiring our outstanding senior subordinated notes and senior discount notes primarily with the proceeds from the issuance of $ 425.0 million of 7 3 / 8 % senior subordinated notes and amending our credit agreement in may 2007. income tax expense . income tax expense was $ 31.7 million for the year ended september 30 , 2008 compared to $ 38.5 million during fiscal 2007. the effective tax rates for fiscal 2008 and fiscal 2007 were 43.0 % and 44.4 % , respectively . the effective tax rates differ from the u.s. statutory rate of 35 % primarily due to nondeductible interest , nondeductible compensation , manufacturing production deductions and state income taxes . in addition , fiscal 2007 included $ 1.1 million of state income tax expense related to periods prior to fiscal 2007 with respect to certain matters associated with the acquisition of mueller co. and anvil . segment analysis mueller co. net sales were $ 718.1 million for the year ended september 30 , 2008 , a decrease of $ 38.0 million , or 5.0 % , compared to $ 756.1 million during fiscal 2007. this decline was primarily due to approximately $ 72 million of lower volumes partially offset by approximately $ 27 million of higher prices and approximately $ 7 million due to the favorable impact of canadian foreign currency exchange rates . lower volumes were principally due to continued weakness in residential construction . higher prices resulted from efforts to offset higher raw material and purchased component costs .
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25 outlook ( 1 ) on january 29 , 2013 the company announced the following expectations for 2013. the company expects to ship 259,000 to 264,000 harley-davidson motorcycles during 2013 , with 71,000 to 76,000 harley-davidson motorcycles expected to ship in the first quarter of 2013 . the 2013 shipment estimates take several factors into consideration , including new model-year 2013 and 2014 products , the continued success of outreach efforts in the u.s. , the improved product availability in the u.s. , continued expansion of the international distribution network and the strong appeal of the harley-davidson brand . at the same time , the company remains cautious on the world economies , in particular in the u.s. and europe . shipment expectations for the first quarter of 2013 reflect an increase of approximately 10 % to 18 % compared to the first quarter of 2012. this increase is expected to be supported by the new surge manufacturing capability launched at the york , pennsylvania ( york ) facility at the start of 2013. the surge manufacturing capabilities at york will rely on a new seasonal workforce and will be supported by similar efforts at the company 's wisconsin manufacturing facilities that supply york . the surge manufacturing capability is expected to enable the company to increase manufacturing capacity in the first half of 2013 to more closely match retail demand . as a result , u.s. retail inventory is expected to increase by the end of the first quarter as dealers replenish inventory to prepare for the 2013 selling season . the company expects to implement surge manufacturing capabilities at its kansas city , missouri ( kansas city ) facility in 2014. consequently , the company expects u.s. retail inventory to be slightly lower on a year over year basis at the end of 2013 as dealers more closely align inventory with the seasonal low point for retail sales in advance of the expected surge manufacturing capability at the kansas city facility . in addition , the company expects full year 2013 gross margin to be between 35.25 % and 36.25 % . in 2013 gross margin is expected to be positively impacted by approximately $ 25 million in incremental restructuring savings , approximately $ 16 million less in temporary inefficiencies , a lower fixed cost per unit on higher production and higher pricing . to a lesser extent , gross margin is also expected to be favorably impacted by changes in product mix . however , these positive benefits are expected to be offset by unfavorable currency impacts due in part to less favorable hedge positions , higher pension expense and pressure on material costs . the company believes operating income from financial services in 2013 will be modestly lower than 2012 as the business benefited from $ 17 million in credit loss allowance releases which may not repeat in 2013. in addition , the company expects changing consumer behavior , hdfs ' funding of additional prudently structured loans in the near-prime and sub-prime segments and lower recoveries resulting from lower charge-offs in prior periods to result in modestly higher credit losses in 2013. the company 's capital expenditure estimates for 2013 are between $ 200 million and $ 220 million . the company anticipates it will have the ability to fund all capital expenditures in 2013 with cash flows generated by operations . the company also announced on january 29 , 2013 that it expects the full year 2013 effective income tax rate to be approximately 34.8 % for continuing operations which includes the impact of the reinstatement of the federal research and development tax credit with the enactment of the american taxpayer relief act of 2012. this guidance excludes the effect of any potential future adjustments such as changes in tax legislation or audit settlements which are recorded as discrete items in the period in which they are settled . restructuring activities ( 1 ) 2011 restructuring plans in december 2011 , the company made a decision to cease operations at new castalloy , its australian subsidiary and producer of cast motorcycle wheels and wheel hubs , and source those components through other existing suppliers . the company expects the transition of supply from new castalloy to be complete in 2013. the decision to close new castalloy comes as part of the company 's overall long term strategy to develop world-class manufacturing capability throughout the company by restructuring and consolidating operations for greater competitiveness , efficiency and flexibility . in connection with the 2011 new castalloy restructuring plan , the company will reduce its workforce by approximately 200 employees by the end of 2013. in february 2011 , the company 's unionized employees at its facility in kansas city , missouri ratified a new seven-year labor agreement . the new agreement took effect on august 1 , 2011. the new contract is similar to the labor agreements ratified 26 at the company 's wisconsin facilities in september 2010 and its york facility in december 2009 , and allows for similar flexibility , increased production efficiency and the addition of a flexible workforce component . the 2011 kansas city restructuring plan results in approximately 145 fewer full-time hourly unionized employees in its kansas city facility than would be required under the previous contract . 2010 restructuring plan in september 2010 , the company 's unionized employees in wisconsin ratified three separate new seven-year labor agreements which took effect in april 2012 when the prior contracts expired . the new contracts are similar to the labor agreement ratified at york in december 2009 and allow for similar flexibility , increased production efficiency and the addition of a flexible workforce component . the 2010 restructuring plan results in approximately 250 fewer full-time hourly unionized employees in its milwaukee-area facilities than would be required under the previous contract and approximately 75 fewer full-time hourly unionized employees in its tomahawk facility than would be required under the previous contract . story_separator_special_tag 34 motorcycle unit shipments the following table includes wholesale motorcycle unit shipments for the motorcycles segment : replace_table_token_20_th * custom motorcycle units , as used in this table , include dyna , softail , v-rod and cvo models . during 2011 , wholesale shipments of harley-davidson motorcycles were up 10.7 % compared to the prior year . temporary production constraints resulting from restructuring efforts at the company 's york facility that impacted its production for 2011 eased during the fourth quarter of 2011 , allowing a slightly higher mix of touring motorcycles compared to the prior year . sportster shipment mix was also higher than in 2010 and near the high end of the historical range of 18 % to 22 % due to strong retail demand for sportster models . segment results the following table includes the condensed statement of operations for the motorcycles segment ( in thousands ) : replace_table_token_21_th 35 the following table includes the estimated impact of the significant factors affecting the comparability of net revenue , cost of goods sold and gross profit from 2010 to 2011 ( in millions ) : replace_table_token_22_th the following factors affected the comparability of net revenue , cost of goods sold and gross profit from 2010 to 2011 : volume increases were driven by the 10.7 % increase in wholesale shipments of harley-davidson motorcycle units as well as higher sales volumes for parts & accessories and general merchandise . on average , wholesale prices on the company 's 2012 model year motorcycles are higher than the prior model year resulting in the favorable impact on revenue and gross profit during the period . foreign currency exchange rates during 2011 relative to 2010 resulted in a positive impact on net revenue . gains and losses associated with the revaluation of foreign-denominated assets and liabilities and foreign currency hedging ( included in cost of goods sold ) were unfavorable when compared to 2010 which offset the majority of the positive impact of currency included in net revenue . shipment mix changes positively impacted net revenue and resulted primarily from product mix changes both between and within the company 's motorcycle families . however , the impact of these mix changes on cost of goods sold mostly offset the benefits included in revenue . raw material prices were higher in 2011 relative to 2010 due to increased metals and fuel costs . manufacturing costs were favorably impacted by savings related to restructuring and continuous improvement initiatives , partially offset by temporary inefficiencies associated with the company 's restructuring and transformation at its york facility . during 2011 , the company experienced $ 32 million in temporary inefficiencies compared to $ 9 million in 2010. the increase in selling , administrative and engineering expense was primarily due to increased spending on growth initiatives and higher recall expenses offset by savings realized from the company 's restructuring efforts and continuous improvement initiatives . in addition , during 2010 the company incurred approximately $ 15 million of non-recurring costs in connection with the company 's efforts to expand its presence in brazil . restructuring expense was lower in 2011 than in 2010. for further information regarding the company 's previously announced restructuring activities , refer to note 4 of notes to condensed consolidated financial statements . financial services segment segment results the following table includes the condensed statements of operations for the financial services segment ( in thousands ) : 36 replace_table_token_23_th interest income decreased during 2011 due to lower average retail and wholesale finance receivables outstanding . interest expense benefited from lower debt levels related to lower average retail and wholesale finance receivables outstanding and a more favorable cost of funds , partially offset by a $ 9.6 million loss on the extinguishment of debt . the provision for credit losses related to retail motorcycle and wholesale receivables decreased by $ 70.1 million and $ 7.1 million , respectively , in 2011 compared to 2010. the decrease in the provision for retail motorcycle credit losses was primarily driven by favorable finance receivable credit loss performance . the decrease in provision for wholesale credit losses was primarily due to favorable finance receivable performance . annual losses on hdfs ' retail motorcycle loans were 1.20 % during 2011 compared to 2.11 % in 2010. the decrease in credit losses from 2010 was due to a lower frequency of loss and a modest improvement in the recovery values of repossessed motorcycles . the 30-day delinquency rate for retail motorcycle loans at december 31 , 2011 decreased to 3.85 % from 5.07 % at december 31 , 2010. changes in the allowance for credit losses on finance receivables were as follows ( in thousands ) : replace_table_token_24_th at december 31 , 2011 , the allowance for credit losses on finance receivables was $ 116.1 million for retail receivables and $ 9.3 million for wholesale receivables . at december 31 , 2010 , the allowance for credit losses on finance receivables was $ 157.8 million for retail receivables and $ 15.8 million for wholesale receivables . as part of the january 1 , 2010 adoption of the new accounting guidance within accounting standards codification ( asc ) topic 810 “ consolidations ” and asc topic 860 “ transfers and servicing ” , the company consolidated an initial allowance for credit losses of $ 49.4 million related to the previously unconsolidated securitized finance receivables through an adjustment to retained earnings . subsequent changes in the provision for credit losses are included in the statement of operations . hdfs ' periodic evaluation of the adequacy of the allowance for credit losses on finance receivables is generally based on hdfs ' past loan loss experience , known and inherent risks in the portfolio , current economic conditions and the estimated value of any underlying collateral . please refer to note 6 of notes to consolidated financial statements for further discussion regarding the company 's allowance for credit losses on finance receivables .
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash outflows from share repurchases were $ 311.6 million , $ 224.5 million and $ 1.7 million for 2012 , 2011 and 2010 , respectively . share repurchases during 2012 and 2011 included 6.7 million and 6.2 million shares of common stock , respectively , related to discretionary share repurchases and shares of common stock that employees surrendered to satisfy withholding taxes in connection with the vesting of restricted stock awards . share repurchases in 2010 were limited to shares of common stock that employees surrendered to satisfy withholding taxes in connection with the vesting of restricted stock awards . as of december 31 , 2012 , 14.5 million shares remained on a board-approved share repurchase authorization . as of december 31 , 2012 , there were no shares available on a separate board-approved share repurchase authorization that is in place to offset option exercises and restricted stock grants . the company 's total outstanding debt consisted of the following as of december 31 , 2012 , 2011 and 2010 ( in thousands ) : replace_table_token_28_th in order to access the debt capital markets , the company relies on credit rating agencies to assign short-term and long-term credit ratings . generally , lower credit ratings result in higher borrowing costs and reduced access to debt capital markets . 43 a credit rating agency may change or withdraw the company 's ratings based on its assessment of the company 's current and future ability to meet interest and principal repayment obligations .
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see “ risk factors risks related to the announced sale of the company 's u.s. federal business an ‘ ownership change ' could limit the company 's ability to utilize net operating losses and certain other tax attributes to offset the gain from the pending sale of the u.s. federal business ” for more information . results of operations company results revenue for 2019 was $ 2.95 billion compared with $ 2.83 billion for 2018 , an increase of 4.4 % principally due to increases within the company 's u.s. business offset in part by the impact of the $ 53.0 million topic 606 adjustment described above . excluding this adjustment , revenue increased 6.4 % . foreign currency fluctuations had a 3 -percentage-point negative impact on revenue in the current year compared with the year-ago period . services revenue increased 7.0 % and technology revenue decreased 9.7 % year over year with the prior-year topic 606 adjustment primarily contributing to the technology revenue decline . excluding the topic 606 adjustment of $ 53.0 million , technology revenue increased 2.7 % . foreign currency fluctuations had a 3 -percentage-point negative impact on services revenue and a 3 -percentage-point negative impact on technology revenue in the current year compared with the year-ago period . revenue from international operations in 2019 and 2018 was $ 1.40 billion and $ 1.59 billion , respectively . without the topic 606 adjustment , 2018 revenue from international operations was $ 1.54 billion . foreign currency had a 4 -percentage-point 21 negative impact on international revenue in 2019 compared with 2018 . revenue from u.s. operations was $ 1.55 billion in 2019 and $ 1.24 billion in 2018 . excluding the topic 606 adjustment , u.s. revenue was $ 1.23 billion in 2018. during 2019 , the company recognized cost-reduction charges and other costs of $ 28.7 million , principally related to a reduction in employees . the charges related to work-force reductions were $ 22.1 million , principally related to severance costs , and were comprised of : ( a ) a charge of $ 4.6 million for 509 employees and $ ( 1.5 ) million for changes in estimates in the u.s. and ( b ) a charge of $ 21.1 million for 255 employees and $ ( 2.1 ) million for changes in estimates outside the u.s. in addition , the company recorded charges of $ 6.6 million comprised of $ 4.6 million for lease abandonment costs , $ 1.1 million for asset write-offs and $ 0.9 million for other expenses related to the cost-reduction effort . the charges were recorded in the following statement of income classifications : cost of revenue – services , $ 10.8 million ; cost of revenue - technology , $ 0.2 million ; selling , general and administrative expenses , $ 15.5 million ; and research and development expenses , $ 2.2 million . during 2018 , the company recognized cost-reduction charges and other costs of $ 19.7 million , principally related to a reduction in employees . the charges related to work-force reductions were $ 19.0 million , principally related to severance costs , and were comprised of : ( a ) a charge of $ 5.2 million for 264 employees and $ 0.1 million for changes in estimates in the u.s. and ( b ) a charge of $ 22.5 million for 325 employees and $ ( 8.8 ) million for changes in estimates outside the u.s. in addition , the company recorded a charge of $ 0.7 million for changes in estimates related to idle leased facilities costs . the 2018 charges were recorded in the following statement of income classifications : cost of revenue - services , $ 18.1 million and selling , general and administrative expenses , $ 1.6 million . gross profit as a percent of total revenue , or gross profit percent , was 22.6 % in 2019 and 24.3 % in 2018 . gross profit in 2018 was positively impacted by the topic 606 adjustment described above . excluding the topic 606 adjustment , total gross profit percent in the prior year was 22.8 % . gross profit in 2019 was positively impacted by $ 19.8 million related to the change in useful life of the company 's proprietary enterprise software . see note 1 , “ summary of significant accounting policies , ” of the notes to consolidated financial statements for further detail . selling , general and administrative expenses were $ 396.9 million in 2019 ( 13.5 % of revenue ) and $ 370.3 million in 2018 ( 13.1 % of revenue ) . included in the prior year was a $ 7.3 million gain on the sale of property in the u.k. excluding the topic 606 adjustment of $ 53.0 million , selling , general and administrative expense as a percentage of revenue was 13.4 % in 2018. research and development ( r & d ) expenses in 2019 were $ 31.3 million compared with $ 31.9 million in 2018 . in 2019 , the company reported an operating profit of $ 238.2 million compared with an operating profit of $ 284.1 million in 2018 . operating profit margin in 2018 was positively impacted by the topic 606 adjustment described above . excluding this adjustment , total operating profit in 2018 was $ 231.1 million . interest expense was $ 62.1 million in 2019 and $ 64.0 million in 2018 . the decline from the prior year was principally due to the convertible notes exchange . see note 14 , “ debt , ” of the notes to consolidated financial statements . other income ( expense ) , net was expense of $ 136.4 million in 2019 compared with expense of $ 76.9 million in 2018 . included in 2019 was postretirement expense of $ 93.3 million , a loss on debt exchange of $ 20.1 million and foreign exchange losses of $ 10.4 million . story_separator_special_tag the company measures its progress toward satisfaction of its performance obligations using the cost-to-cost method , or when services have been performed , depending on the nature of the project . for contracts accounted for using the cost-to-cost method , revenue and profit recognized in any given accounting period are based on estimates of total projected contract costs . the estimates are continually reevaluated and revised , when necessary , throughout the life of a contract . the company follows this method because reasonably dependable estimates of the revenue and costs applicable to various elements of a contract can be made . the financial reporting of these contracts depends on estimates , which are assessed continually during the term of the contracts and therefore , recognized revenues and profit are subject to revisions as the contract progresses to completion . revisions in profit estimates are reflected in the period in which the facts that give rise to the revision become known . accordingly , favorable changes in estimates result in additional revenue and profit recognition , and unfavorable changes in estimates result in a reduction of recognized revenue and profit . when estimates indicate that a loss will be incurred on a contract upon completion , a provision for the expected loss is recorded in the period in which the loss becomes evident . as work progresses under a loss contract , revenue continues to be recognized , and a portion of the contract costs incurred in each period is charged to the contract loss reserve . outsourcing typically , the initial terms of the company 's outsourcing contracts are between 3 and 5 years . revenue under these contracts is recognized when the company performs the services or processes transactions in accordance with contractual performance standards . customer prepayments ( even if nonrefundable ) are deferred ( classified as a liability ) and recognized systematically as revenue over the initial contract term . costs on outsourcing contracts are charged to expense as incurred . however , direct costs incurred related to the inception of an outsourcing contract ( principally initial customer setup ) are deferred and charged to expense over the initial contract term . in addition , the costs of equipment and software , some of which are internally developed , are capitalized and depreciated over the shorter of their life or the initial contract term . recoverability of outsourcing assets is subject to various business risks . quarterly , the company compares the carrying value of the outsourcing assets with the undiscounted future cash flows expected to be generated by the outsourcing assets to determine if the assets are impaired . if impaired , the outsourcing assets are reduced to an estimated fair value on a discounted cash flow approach . the company prepares its cash flow estimates based on assumptions that it believes to be reasonable but are also inherently uncertain . actual future cash flows could differ from these estimates . income taxes accounting rules governing income taxes require that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities . these rules also require that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or the entire deferred tax asset will not be realized . at december 31 , 2019 and 2018 , the company had deferred tax assets in excess of deferred tax liabilities of $ 1,617.8 million and $ 1,636.9 million , respectively . for the reasons cited below , at december 31 , 2019 and 2018 , management determined that it is more likely than not that $ 93.1 million and $ 89.4 million , respectively , of such assets will be realized , resulting in a valuation allowance of $ 1,524.7 million and $ 1,547.5 million , respectively . the company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance , if necessary . the factors used to assess the likelihood of realization are the company 's historical profitability , forecast of future taxable income and available tax-planning strategies that could be implemented to realize the net deferred tax assets . the company uses tax-planning strategies to realize or renew net deferred tax assets to avoid the potential loss of future tax benefits . failure to achieve forecasted taxable income might affect the ultimate realization of the net deferred tax assets . factors that may affect the company 's ability to achieve sufficient forecasted taxable income include , but are not 27 limited to , the following : increased competition , a decline in sales or margins , loss of market share , delays in product availability or technological obsolescence . see “ item 1a . risk factors . ” internal revenue code sections 382 and 383 provide annual limitations with respect to the ability of a corporation to utilize its net operating loss ( as well as certain built-in losses ) and tax credit carryforwards , respectively ( tax attributes ) , against future u.s. taxable income , if the corporation experiences an “ ownership change . ” in general terms , an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period . the company regularly monitors ownership changes ( as calculated for purposes of section 382 ) . the company has determined that , for purposes of the rules of section 382 described above , an ownership change occurred in february 2011. any future transaction or transactions and the timing of such transaction or transactions could trigger additional ownership changes under section 382. as a result of the february 2011 ownership change , utilization for certain of the company 's tax attributes , u.s. net operating losses and tax
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash used for investing activities in 2019 was $ 158.2 million compared with cash usage of $ 185.0 million in 2018 . net proceeds from investments in 2019 were $ 2.8 million compared with net purchases of $ 14.0 million in 2018 . proceeds from investments and purchases of investments represent derivative financial instruments used to manage the company 's currency exposure to market risks from changes in foreign currency exchange rates . in addition , capital additions of properties were $ 38.0 million in 2019 compared with $ 35.6 million in 2018 , capital additions of outsourcing assets were $ 48.8 million in 2019 compared with $ 73.0 million in 2018 and the investment in marketable software was $ 73.0 million in 2019 compared with $ 80.7 million in 2018 . the decrease in capital expenditures is attributed in part to the company funding some of the 2019 additions by entering into installment payment and vendor agreements . the prior-year period includes net proceeds of $ 19.2 million related to the sale of property in the u.k. cash used for financing activities during 2019 was $ 38.0 million compared with cash used for financing activities of $ 4.8 million in 2018 . the increase in cash usage in the current year is principally due to the convertible notes exchange partially offset by proceeds received from the issuance of debt as described below . at december 31 , 2019 , total debt was $ 579.6 million compared with $ 652.8 million at december 31 , 2018 . the decrease is primarily due to the convertible notes exchange offset in part by the issuance of debt described below .
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valuation of stock-based compensation we measure and recognize compensation expense for all stock-based awards to our employees and directors , including stock options , restricted stock awards and employee stock purchases related to our employee stock purchase plan ( espp ) based on estimated fair values . we use the black scholes option-pricing valuation model to estimate the grant-date fair value of our stock options and employee stock plan purchases . option-pricing model assumptions such as expected volatility , risk-free interest rate and expected term impact the fair value estimate . 41 further , the estimated forfeiture rate impacts the amount of aggregate compensation recognized during the period . the fair value of stock options and employee stock purchases is amortized over the vesting period of the awards using a straight-line method . expected volatilities are based on historical volatilities of our stock since traded options on geron stock do not correspond to option terms and trading volume of options is limited . the expected term of options represents the period of time that options granted are expected to be outstanding . in deriving this assumption , we reviewed actual historical exercise and cancellation data and the remaining outstanding options not yet exercised or cancelled . the expected term of employees ' purchase rights , under our espp , is equal to the purchase period . the risk-free interest rate is based on the u.s. zero coupon treasury strip yields for the expected term in effect on the date of grant . forfeiture rate was estimated based on historical experience and will be adjusted over the requisite service period based on the extent to which actual forfeitures differ , or are expected to differ , from their estimate . we grant restricted stock awards to employees and non-employee directors with three types of vesting schedules : ( i ) service-based , ( ii ) performance-based or ( iii ) market-based . service-based restricted stock awards ( rsas ) generally vest annually over four years . performance-based stock awards ( psas ) vest only upon achievement of discrete strategic goals within a specified performance period , generally three years . market-based stock awards ( msas ) vest only upon achievement of certain market price thresholds of our common stock within a specified performance period , generally three years . the fair value for service-based rsas is determined using the fair value of our common stock on the date of grant and reduced for estimated forfeitures , as applicable . the fair value is amortized as compensation expense over the requisite service period of the award on a straight-line basis . the fair value for psas is determined using the fair value of our common stock on the date of grant and reduced for estimated forfeitures , as applicable . compensation expense for psas is recognized over the period from the date the performance condition is determined to be probable of occurring through the date the applicable condition is expected to be met . if the performance condition is not considered probable of being achieved , no expense is recognized until such time as the performance condition is considered probable of being met , if ever . we evaluate whether performance conditions are probable of occurring , as well as the expected performance period , on a quarterly basis . the fair value for msas is determined using a lattice valuation model with a monte carlo simulation . the model takes into consideration the historical volatility of our stock and the risk-free interest rate at the date of grant . in addition , the model is used to estimate the derived service period for the msas . the derived service period is the estimated period of time that would be required to satisfy the market condition , assuming the market condition will be satisfied . compensation expense is recognized over the derived service period for the msas using the straight-line method , but is accelerated if the market condition is achieved earlier than estimated . we annually evaluate the assumptions used in estimating fair values of our stock-based awards by reviewing current trends in comparison to historical data . we have not revised the methods by which we derive assumptions in order to estimate fair values of our stock-based awards . if factors change and we employ different assumptions in future periods , the stock-based compensation expense that we record for awards to employees and directors may differ significantly from what we have recorded in the current period . non-cash compensation expense recognized for stock-based awards to employees and directors was $ 15.2 million , $ 13.7 million and $ 10.6 million for the years ended december 31 , 2011 , 2010 and 2009 , respectively . as of december 31 , 2011 , total compensation cost related to unvested stock awards not yet recognized , net of estimated forfeitures and assuming no probability of achievement for outstanding psas , was $ 13.1 million , which is expected to be recognized over the next 34 months on a weighted-average basis . for our non-employee stock-based awards , the measurement date on which the fair value of the stock-based award is calculated is equal to the earlier of ( i ) the date at which a commitment for performance by the counterparty to earn the equity instrument is reached or ( ii ) the date at which the counterparty 's performance is complete . we recognized non-cash stock-based compensation expense of $ 114,000 , $ 463,000 and $ 190,000 for the fair value of the vested portion of non-employee options , restricted stock awards and warrants in our consolidated statements of operations for the years ended december 31 , 2011 , 2010 and 2009 , respectively . 42 fair value of financial instruments we categorize assets and liabilities recorded at fair value on our consolidated balance sheet based upon the level of judgment associated with inputs used to measure their fair value . story_separator_special_tag acquired in-process research and development as consideration for the license rights to angiochem 's proprietary peptide technology for the clinical development of ang1005 ( now grn1005 ) , we paid angiochem an upfront payment of $ 7.5 million in cash in december 2010 and on january 5 , 2011 , issued 5,261,144 shares of common stock to angiochem as payment of our obligation to issue $ 27.5 million in stock . further clinical and process development of grn1005 is required before any viable commercial application can be identified or utilized . we have concluded that this technology has no alternative future use , and accordingly , expensed the total upfront payment of $ 35.0 million in connection with the license agreement as acquired in-process research and development expense at the time of acquisition . see note 11 on license agreements in notes to consolidated financial statements of this form 10-k for further discussion of the exclusive license agreement with angiochem . restructuring charges on november 14 , 2011 , we announced the decision to focus exclusively on the development of our oncology programs and consequently , we discontinued further development of our stem cell programs . with this decision , a total of 66 full-time positions were eliminated , of which as of february 1 , 2012 , 14 employees are continuing to provide services and are discontinuing employment with us through various dates in the first half of 2012. in connection with the restructuring , we recorded aggregate restructuring charges of approximately $ 5.4 million , of which $ 4.6 million related to one-time termination benefits , including $ 174,000 of non-cash stock-based compensation expense relating to the extension of the post-termination exercise period for certain stock options previously granted to terminated employees to june 30 , 2013 and december 31 , 2013 , and $ 874,000 related to write-downs of excess lab equipment and leasehold improvements and other charges . we may incur additional charges as a result of the restructuring as we exit one of the three buildings in which we lease space in menlo park , california , which will be recorded as they are determined . we also plan to sell any excess equipment , the net proceeds of which may offset some of these future charges . we expect the restructuring will result in aggregate cash expenditures of approximately $ 4.4 million , of which $ 671,000 related to one-time termination benefits was paid as of december 31 , 2011 and approximately $ 3.7 million related to one-time termination benefits is expected to be paid during 2012. without the restructuring , we estimated that we would have incurred approximately $ 25.0 million in research and development expenses in connection with our stem cell programs in 2012. see note 7 on restructuring in notes to consolidated financial statements of this form 10-k for further discussion of the restructuring charges . general and administrative expenses general and administrative expenses were $ 23.8 million , $ 18.0 million and $ 14.3 million for the years ended december 31 , 2011 , 2010 and 2009 , respectively . the increase in 2011 from 2010 was primarily the result of higher non-cash stock-based compensation expense of $ 2.2 million related to stock options and restricted stock awards to employees , severance expenses of $ 1.6 million related to separation agreements executed with our former chief executive officer ( ceo ) and chief financial officer ( cfo ) and higher corporate legal and consulting fees of $ 1.0 million . the increase in 2010 from 2009 was primarily due to higher non-cash stock-based compensation expense of $ 1.9 million related to stock options and restricted stock awards to employees , increased consulting and legal costs of $ 916,000 and higher costs associated with managing our intellectual property portfolio of $ 405,000 . 47 unrealized gain on fair value of derivatives unrealized gain on fair value of derivatives reflects a non-cash adjustment for changes in fair value of warrants to purchase common stock and options held by non-employees that are classified as current liabilities . derivatives classified as assets or liabilities are marked to fair value at each financial reporting date with any resulting unrealized gain ( loss ) recorded in the consolidated statements of operations . the derivatives continue to be reported as an asset or liability until such time as the instruments are exercised or expire or are otherwise modified to remove the provisions which require them to be recorded as assets or liabilities , at which time these instruments are marked to fair value and reclassified from assets or liabilities to stockholders ' equity . we incurred unrealized gains of $ 643,000 , $ 190,000 and $ 157,000 for the years ended december 31 , 2011 , 2010 and 2009 , respectively . the unrealized gains on derivatives for 2011 , 2010 and 2009 primarily reflect reduced fair values of derivative liabilities resulting from shortening of their contractual terms , decreases in the market value of our stock and changes in other inputs factored into the estimate of their fair value such as the volatility of our stock . see note 2 on fair value measurements in notes to consolidated financial statements of this form 10-k for further discussion of the fair value of derivatives . interest and other income interest income was $ 1.0 million , $ 818,000 and $ 1.3 million for the years ended december 31 , 2011 , 2010 and 2009 , respectively . the increase in interest income in 2011 compared to 2010 was due to higher cash and investment balances for the majority of 2011 as a result of the receipt of $ 93.7 million in net proceeds in december 2010 from an underwritten public offering of our common stock . the decrease in interest income in 2010 compared to 2009 was primarily the result of lower cash and investment balances for the majority of 2010. interest earned in future periods will
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources cash , restricted cash , cash equivalents and marketable securities at december 31 , 2011 were $ 154.2 million , compared to $ 221.3 million at december 31 , 2010 and $ 167.1 million at december 31 , 2009. we have an investment policy to invest these funds in liquid , investment grade securities , such as interest-bearing money market funds , certificates of deposit , municipal securities , u.s. government and agency securities , corporate notes , commercial paper and asset-backed securities . our investment portfolio does not contain securities with exposure to sub-prime mortgages , collateralized debt obligations or auction rate securities and , to date , we have not recognized an other-than-temporary impairment on our marketable securities or any significant changes in aggregate fair value that would impact our cash resources or liquidity . to date , we have not experienced lack of access to our invested cash and cash equivalents ; however , we can not provide assurances that access to our invested cash and cash equivalents will not be impacted by adverse conditions in the financial markets . the decrease in cash , restricted cash , cash equivalents and marketable securities in 2011 was the result of cash being used for operations . the increase in cash , restricted cash , cash equivalents and marketable securities in 2010 was the net result of the receipt of $ 93.7 million in net proceeds in december 2010 from an underwritten public offering of our common stock and the receipt of $ 10.0 million in net proceeds in january 2010 from the sale of shares of our common stock and warrants to purchase additional shares of our common stock to institutional investors , partially offset by the use of cash for operations . 49 we estimate that our existing capital resources , interest income and amounts available to us under our equipment financing facility will be sufficient to fund our current level of operations through at least the next 12 months . however , our future capital requirements will be substantial .
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additionally , we are obligated to repurchase from j. aron certain products located at our j. aron storage tanks upon termination of these agreements ; restrictive covenants in our indebtedness that may adversely affect our operational flexibility or ability to make distributions ; our assumptions regarding payments arising under pbf energy 's tax receivable agreement and other arrangements relating to pbf energy ; our expectations and timing with respect to our acquisition activity ; the impact of disruptions to crude or feedstock supply to any of our refineries , including disruptions due to problems at pbfx or with third-party logistics infrastructure or operations , including pipeline , marine and rail transportation ; the impact of current and future laws , rulings and governmental regulations , including the implementation of rules and regulations regarding transportation of crude oil by rail ; 48 the impact of the recently enacted federal income tax legislation on our business ; the threat of cyber-attacks ; the effectiveness of our crude oil sourcing strategies , including our crude by rail strategy and related commitments ; adverse impacts related to legislation by the federal government lifting the restrictions on exporting u.s. crude oil ; adverse impacts from changes in our regulatory environment , such as the effects of compliance with ab32 , or from actions taken by environmental interest groups ; market risks related to the volatility in the price of rins required to comply with the renewable fuel standards and ghg emission credits required to comply with various ghg emission programs , such as ab32 ; our ability to complete the successful integration of the martinez refinery and any other acquisitions into our business and to realize the benefits from such acquisitions ; unforeseen liabilities associated with the martinez acquisition and any other acquisitions ; and any decisions we continue to make with respect to our energy-related logistics assets that may be transferred to pbfx . we caution you that the foregoing list of important factors may not contain all of the material factors that are important to you . in addition , in light of these risks and uncertainties , the matters referred to in the forward-looking statements contained in this annual report on form 10-k may not in fact occur . accordingly , investors should not place undue reliance on those statements . our forward-looking statements speak only as of the date of this annual report on form 10-k. except as required by applicable law , including the securities laws of the united states , we do not intend to update or revise any forward-looking statements . all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing . executive summary we were formed in march 2008 to pursue the acquisitions of crude oil refineries and downstream assets in north america . as of december 31 , 2019 , we owned and operated five domestic oil refineries and related assets located in delaware city , delaware , paulsboro , new jersey , toledo , ohio , chalmette , louisiana and torrance , california . our refineries have a combined processing capacity , known as throughput , of approximately 900,000 bpd , and a weighted average nelson complexity index of 12.2. our five oil refineries are all engaged in the refining of crude oil and other feedstocks into petroleum products , and are aggregated into one reportable segment . following the completion of the martinez acquisition , we increased our total throughput capacity to over 1,000,000 bpd and became the most complex independent refiner with a consolidated nelson complexity of 12.8. factors affecting comparability our results over the past three years have been affected by the following events , the understanding of which will aid in assessing the comparability of our period to period financial performance and financial condition . torrance land sale on august 1 , 2019 and august 7 , 2018 , we closed on third-party sales of parcels of real property acquired as part of the torrance refinery , but not part of the refinery itself . the sales resulted in gains of approximately $ 33.1 million and $ 43.8 million in the third quarter of 2019 and 2018 , respectively , included within gain on sale of assets in the consolidated statements of operations . 49 inventory intermediation agreements the inventory intermediation agreements with j. aron were amended in the first quarter of 2019 and amended and restated in the third quarter of 2019 , pursuant to which certain terms of the inventory intermediation agreements were amended , including , among other things , the maturity date . on march 29 , 2019 , the inventory intermediation agreement by and among j. aron , us and dcr was amended to add the pbfx east coast storage assets as a location and crude oil as a new product type to be included in the products sold to j. aron by dcr . on august 29 , 2019 , the inventory intermediation agreement by and among j. aron , us and prc was extended to december 31 , 2021 , which term may be further extended by mutual consent of the parties to december 31 , 2022 , and the inventory intermediation agreement by and among j. aron , us and dcr was extended to june 30 , 2021 , which term may be further extended by mutual consent of the parties to june 30 , 2022. pursuant to each inventory intermediation agreement , j. aron continues to purchase and hold title to the j. aron products produced by the east coast refineries , and delivered into our j. aron storage tanks . furthermore , j. aron agrees to sell the j. aron products back to the east coast refineries as they are discharged out of our j. aron storage tanks . story_separator_special_tag the remaining throughput consists of sweet crude oil and other feedstocks and blendstocks . in addition , we have the capability to process a significant volume of light , sweet crude oil depending on market conditions . our total throughput costs have historically priced at a discount to dated brent ; and as a result of the heavy , sour crude slate processed at delaware city , we produce lower value products including sulfur , carbon dioxide and petroleum coke . these products are priced at a significant discount to rbob and ulsd . 53 paulsboro refinery . the benchmark refining margin for the paulsboro refinery is calculated by assuming that two barrels of dated brent crude oil are converted into one barrel of gasoline and one barrel of diesel . we calculate this benchmark using the nyh market value of rbob and ulsd against the market value of dated brent and refer to the benchmark as the dated brent ( nyh ) 2-1-1 benchmark refining margin . our paulsboro refinery has a product slate of approximately 44 % gasoline , 34 % distillate and 3 % high-value group i lubricants , with the remaining portion of the product slate comprised of lower-value products ( 13 % black oil , 2 % petroleum coke , and 4 % lpgs ) . for this reason , we believe the dated brent ( nyh ) 2-1-1 is an appropriate benchmark industry refining margin . the majority of paulsboro revenues are generated off nyh-based market prices . the paulsboro refinery 's realized gross margin on a per barrel basis has historically differed from the dated brent ( nyh ) 2-1-1 benchmark refining margin due to the following factors : the paulsboro refinery processes a slate of primarily medium and heavy sour crude oils , which has historically constituted approximately 75 % to 85 % of total throughput . the remaining throughput consists of sweet crude oil and other feedstocks and blendstocks ; as a result of the heavy , sour crude slate processed at paulsboro , we produce lower value products including sulfur and petroleum coke . these products are priced at a significant discount to rbob and ulsd ; and the paulsboro refinery produces group i lubricants which carry a premium sales price to rbob and ulsd . toledo refinery . the benchmark refining margin for the toledo refinery is calculated by assuming that four barrels of wti crude oil are converted into three barrels of gasoline , one-half barrel of ulsd and one-half barrel of jet fuel . we calculate this refining margin using the chicago market values of conventional blendstock for oxygenate blending and ulsd and the united states gulf coast value of jet fuel against the market value of wti and refer to this benchmark as the wti ( chicago ) 4-3-1 benchmark refining margin . our toledo refinery has a product slate of approximately 55 % gasoline , 34 % distillate , 5 % high-value petrochemicals ( including nonene , tetramer , benzene , xylene and toluene ) with the remaining portion of the product slate comprised of lower-value products ( 4 % lpgs and 2 % other ) . for this reason , we believe the wti ( chicago ) 4-3-1 is an appropriate benchmark industry refining margin . the majority of toledo revenues are generated off chicago-based market prices . the toledo refinery 's realized gross margin on a per barrel basis has historically differed from the wti ( chicago ) 4-3-1 benchmark refining margin due to the following factors : the toledo refinery processes a slate of domestic sweet and canadian synthetic crude oil . historically , toledo 's blended average crude costs have differed from the market value of wti crude oil ; the toledo refinery configuration enables it to produce more barrels of product than throughput which generates a pricing benefit ; and the toledo refinery generates a pricing benefit on some of its refined products , primarily its petrochemicals . chalmette refinery . the benchmark refining margin for the chalmette refinery is calculated by assuming two barrels of lls crude oil are converted into one barrel of gasoline and one barrel of diesel . we calculate this benchmark using the us gulf coast market value of 87 conventional gasoline and ulsd against the market value of lls and refer to this benchmark as the lls ( gulf coast ) 2-1-1 benchmark refining margin . our chalmette refinery has a product slate of approximately 50 % gasoline and 33 % distillate , with the remaining portion of the product slate comprised of lower-value products ( 8 % black oil , 4 % petroleum coke , 3 % lpgs , and 2 % petrochemical feedstocks ) . for this reason , we believe the lls ( gulf coast ) 2-1-1 is an appropriate benchmark industry refining margin . the majority of chalmette revenues are generated off gulf coast-based market prices . the chalmette refinery 's realized gross margin on a per barrel basis has historically differed from the lls ( gulf coast ) 2-1-1 benchmark refining margin due to the following factors : the chalmette refinery has generally processed a slate of primarily medium and heavy sour crude oils , which has historically constituted approximately 55 % to 65 % of total throughput . the remaining throughput consists of sweet crude oil and other feedstocks and blendstocks ; and as a result of the heavy , sour crude slate processed at chalmette , we produce lower-value products including sulfur and petroleum coke . these products are priced at a significant discount to 87 conventional gasoline and ulsd . 54 the prl ( pre-treater , reformer , light ends ) project was completed in 2017 which has increased high-octane , ultra-low sulfur reformate and chemicals production . the new crude oil tank was also commissioned in 2017 and is allowing additional gasoline and diesel exports , reduced rins compliance costs and lower crude ship demurrage
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | compared to net cash provided by operating activities of $ 471.1 million for the year ended december 31 , 2017 . our operating cash flows for the year ended december 31 , 2017 included our net income of $ 457.2 million , depreciation and amortization of $ 274.7 million , pension and other post-retirement benefits costs of $ 42.2 million , debt extinguishment costs of $ 25.5 million , stock-based compensation of $ 21.5 million , change in the fair value of our inventory repurchase obligations of $ 13.8 million , distributions from our equity method investment in tvpc of $ 20.2 million , changes in the fair value of our catalyst obligations of $ 2.2 million and loss on sale of assets of $ 1.5 million , partially offset by a non-cash benefit of $ 295.5 million relating to an lcm inventory adjustment , income from our equity method investment in tvpc of $ 14.6 million and deferred income taxes of $ 12.5 million . in addition , net changes in operating assets and liabilities reflected uses of cash of $ 65.1 million driven by the timing of inventory purchases , payments for accrued expenses and accounts payable and collections of accounts receivables . cash flows from investing activities net cash used in investing activities was $ 680.2 million for the year ended december 31 , 2019 compared to net cash used in investing activities of $ 509.6 million for the year ended december 31 , 2018 . the net cash flows used in investing activities for the year ended december 31 , 2019 was comprised of capital expenditures totaling $ 373.1 million , expenditures for refinery turnarounds of $ 299.3 million , and expenditures for other assets of $ 44.7 million , partially offset by proceeds of $ 36.3 million related to the sale of land at our torrance refinery and a $ 0.6 million return of capital from our equity method investment in tvpc .
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favorable loss reserve development associated with delinquency notices received in prior years was $ 167 million and $ 231 million , in 2018 and 2017 , respectively , due to a lower estimated claim rate in each year compared to the prior year-end . during 2018 , mgic paid $ 220 million in dividends to our holding company . during 2018 , we repurchased approximately 16.0 million shares of our common stock for approximately $ 175 million . business environment economic conditions current u.s. economic conditions continue to support favorable housing fundamentals , such as low unemployment , strong consumer confidence , increasing household formations , and appreciating home values . we benefit from favorable housing fundamentals that increase home purchase activity and provide borrowers reliable , or increasing , financial resources . as a result of the current and expected economic conditions , mortgage interest rates have been higher on average in 2018 compared to 2017. the increase in mortgage interest rates did not materially impact home purchasing activity in 2018. despite the impact of rising rates on housing affordability , the homeownership rate continued to edge up in 2018. in particular , the homeownership rate of those 35 and younger ( which likely includes many first time homebuyers that require mortgage insurance ) is indicated to be at levels last seen in 2013. the increase in purchase mortgage originations , and first-time homebuyer activity , resulted in a modest increase in our niw in 2018 when compared to 2017. the level of unemployment , interest rates , and home prices may change in the future . for the possible effects of such changes , see our risk factors titled `` if the volume of low down payment home mortgage originations declines , the amount of insurance that we write could decline , ” “ downturns in the domestic economy or declines in the value of borrowers ' homes from their value at the time their loans closed may result in more homeowners defaulting and our losses increasing , with a corresponding decrease in our returns , ” and “ changes in interest rates , house prices or mortgage insurance cancellation requirements may change the length of time that our policies remain in force . `` mortgage lending these recent years of favorable housing fundamentals and in our view , favorable risk characteristics of insured loans , has provided a favorable credit backdrop for the business we have written in recent years . in that regard , we have experienced a declining delinquent inventory , and lower losses incurred and claims paid . our most recent book years continue to experience a low level of losses . although we generally view the risk characteristics of 2018 insured loans to be favorable , lending standards did ease in 2018. the percentage of our niw with dti ratios over 45 % increased significantly in 2018 compared to recent years . the increase was primarily driven by adjustments to gse underwriting guidelines for loans with dti ratios over 45 % . the rising cost of homeownership and a decrease in the percentage of our niw from refinance transactions also resulted in an increasing percentage of our niw with ltv ratios over 95 % . refer to `` mortgage insurance portfolio `` for additional discussion of changes in our niw mix during 2018 and our efforts to mitigate our risk from the increase in niw with dti ratios over 45 % . competition pmi . the private mortgage insurance industry is highly competitive and is expected to remain so . we believe that we currently compete with other private mortgage insurers based on premium rates , underwriting requirements , financial strength ( including based on credit or financial strength ratings ) , customer relationships , name recognition , reputation , the strength of our management team and field organization , the ancillary products and services provided to lenders and the effective use of technology and innovation in the delivery and servicing of our mortgage insurance products . mgic investment corporation 2018 form 10-k | 45 mgic investment corporation and subsidiaries management 's discussion and analysis | glossary of terms and acronyms pricing practices much of the competition in the industry in the last few years has centered on pricing practices which have included : ( i ) reductions in standard filed rates for borrower-paid mortgage insurance policies ( `` bpmi `` ) ; ( ii ) use by competitors of a spectrum of filed rates to allow for formulaic , risk-based pricing that may be adjusted more frequently within certain parameters ( referred to as `` loan level pricing systems `` ) ; and ( iii ) use of customized rates ( discounted from standard rates ) that are made available to lenders that meet certain criteria . in response to industry competition , and changing customer preferences , the delivery of premium rates has continued to migrate from standard rate cards , to use of loan level pricing systems ; and use of customized rates ( discounted from standard rates ) that are made available to lenders that meet certain criteria . loan level pricing systems incorporate more loan attributes than standard rate cards . they are considered more dynamic pricing models that can react faster to changing market conditions , including those conditions that increase or decrease risk , and they assist in managing risk and shaping the insured portfolio . we expect the adoption of mortgage insurers ' loan level pricing systems by lenders to continue to increase . our pricing approach continues to evolve with the industry . in the first quarter of 2019 we introduced miq , our loan level pricing system . we expect adoption of miq to increase during 2019 and the pace of adoption will be driven primarily by customer demand . story_separator_special_tag from 2008 through 2012 , we were notified of modifications that cured delinquencies that , had they become paid claims , would have resulted in a material increase in our incurred losses . nearly all of the reported loan modifications were for loans insured in 2009 and prior . we can not determine the total benefit we may derive from loan modification programs , particularly given the uncertainty around the re-default rates for defaulted loans that have been modified . our loss reserves do not account for potential re-defaults of current loans . the following table shows the percentage of our primary rif that has been modified as of december 31 , 2018 . replace_table_token_13_th ( 1 ) includes proprietary programs that are substantially the same as harp . approximately 12.6 % of our total primary rif has been modified as of december 31 , 2018 . based on loan count at december 31 , 2018 , the loans associated with 97.6 % of all harp modifications and 79.6 % of hamp and other modifications were current . factors affecting our results our results of operations are affected by : premiums written and earned premiums written and earned in a year are influenced by : niw , which increases iif . many factors affect niw , including the volume of low down payment home mortgage originations and competition to provide credit enhancement on those mortgages from the fha , the va , other mortgage insurers , gse programs that may reduce or eliminate the demand for mortgage insurance and other alternatives to mortgage insurance . niw does not include loans previously insured by us that are modified , such as loans modified under harp . cancellations , which reduce iif . cancellations due to refinancings are affected by the level of current mortgage interest rates compared to the mortgage coupon rates throughout the in force book , current home values compared to values when the loans in the in force book were insured and the terms on which mortgage credit is available . home price appreciation can give homeowners the right to cancel mortgage insurance on their loans if sufficient home equity is achieved . cancellations also result from policy rescissions , which require us to return any premiums received on the rescinded policies , and claim payments , which require us to return any premium received on the related policies from the date of default on the insured loans . mgic investment corporation 2018 form 10-k | 49 mgic investment corporation and subsidiaries management 's discussion and analysis | glossary of terms and acronyms cancellations of single premium policies , which are generally non-refundable , result in immediate recognition of any remaining unearned premium . premium rates , which are affected by product type , competitive pressures , the risk characteristics of the insured loans and the percentage of coverage on the insured loans . the substantial majority of our monthly and annual mortgage insurance premiums are under premium plans for which , for the first ten years of the policy , the amount of premium is determined by multiplying the initial premium rate by the original loan balance ; thereafter , the premium rate resets to a lower rate used for the remaining life of the policy . however , for loans that have utilized harp , the initial ten-year period resets as of the date of the harp transaction . the remainder of our monthly and annual premiums are under premium plans for which premiums are determined by a fixed percentage of the loan 's amortizing balance over the life of the policy . premiums ceded , net of a profit commission , under our quota share reinsurance transactions , and premiums ceded under our excess of loss reinsurance transaction . see note 9 – “ reinsurance ” to our consolidated financial statements for a discussion of our reinsurance transactions . premiums earned are generated by the insurance that is in force during all or a portion of the period . a change in the average iif in the current period compared to an earlier period is a factor that will increase ( when the average in force is higher ) or reduce ( when it is lower ) premiums earned in the current period , although this effect may be enhanced ( or mitigated ) by differences in the average premium rates between the two periods , as well as by premiums that are returned or expected to be returned in connection with claim payments and rescissions , and premiums ceded under reinsurance transactions . also , niw and cancellations during a period will generally have a greater effect on premiums earned in subsequent periods than in the period in which these events occur . investment income our investment portfolio is composed principally of investment grade fixed income securities . the principal factors that influence investment income are the size of the portfolio and its yield . as measured by amortized cost ( which excludes changes in fair value , such as from changes in interest rates ) , the size of the investment portfolio is mainly a function of cash generated from ( or used in ) operations , such as npw , investment income , net claim payments and expenses , and cash provided by ( or used for ) non-operating activities , such as debt or stock issuances or repurchases . losses incurred losses incurred are the current expense that reflects estimated payments that will ultimately be made as a result of delinquencies on insured loans . as explained under “ critical accounting policies ” below , we recognize an estimate of this expense only for delinquent loans . the level of new delinquencies has historically followed a seasonal pattern , with new delinquencies in the first part of the year lower than new delinquencies in the latter part of the year , though this pattern can be affected by the state of
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | . cash inflows included $ 220 million of dividends received from mgic and $ 35 million of other inflows , which included intercompany activity . cash outflows included $ 163 million used to repurchase shares of our common stock and $ 60 million of interest payments , of which approximately $ 12 million was paid to mgic for the portion of our 9 % debentures owned by mgic . the net unrealized losses on our holding company investment portfolio were approximately $ 2.2 million at december 31 , 2018 and the portfolio had a modified duration of approximately 1.4 years . scheduled debt maturities beyond the next twelve months include $ 425 million of our 5.75 % notes in 2023 and $ 389.5 million of our 9 % debentures in 2063 , of which mgic owns $ 132.7 million . the principal amount of the 9 % debentures is currently convertible , at the holder 's option , at an initial conversion rate , which is subject to adjustment , of 74.0741 common shares per $ 1,000 principal amount of debentures . this represents an initial conversion price of approximately $ 13.50 per share . we may redeem the 9 % debentures in whole or in part from time to time , at our option , at a redemption price equal to 100 % of the principal amount of the 9 % debentures being redeemed , plus any accrued and unpaid interest , if the closing sale price of our common stock exceeds $ 17.55 for at least 20 of the 30 trading days preceding notice of the redemption .
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factors that could impact results of operations the factors outlined below could impact our future results of operations . for more extensive discussion of these and other risk factors , please refer to `` risk factors `` , under part i , item1a in this report . general business and economic conditions our business has been affected by general business and economic conditions , and these conditions could have an impact on future demand for our products . the global economic environment continues to be challenging , and we expect the uncertainty to continue . in light of the macroeconomic environment , we continue to take steps to further align our cost structure with our anticipated level of net sales . we continued to make strategic investments , including : introducing new products ; investing in increasing our global brand awareness ; extending our presence and improving our retail account productivity and distribution ; investing in our operating infrastructure to meet the requirements of our business ; and taking actions to further strengthen our business . competition participants in the bedding industry compete primarily on price , quality , brand name recognition , product availability , and product performance . we compete with a number of different types of mattress alternatives , including standard innerspring mattresses , viscoelastic mattresses , foam mattresses , hybrid innerspring/foam mattresses , futons , air beds and other air-supported mattresses . these alternative products are sold through a variety of channels , including furniture and bedding stores , department stores , mass merchants , wholesale clubs , internet , telemarketing programs , television infomercials , television advertising and catalogs . our tempur north america segment competes in the non-innerspring mattress category and contributes 36.9 % of our net sales . beginning in the second half of 2012 , a significant number of new non-innerspring mattress products were introduced in this category and changed the competitive environment of the u.s. bedding industry . many of these new non-innerspring mattress products have been supported by aggressive marketing campaigns and promotions . as a result of this change , our results have been negatively impacted and we modified our business strategy to compete and expand our market share . our results could continue to be challenged . 31 financial leverage as of december 31 , 2013 , we had $ 1,836.5 million of debt outstanding , and our stockholders ' equity was $ 114.0 million . higher financial leverage makes us more vulnerable to general adverse competitive , economic and industry conditions . there can be no assurance that our business will generate sufficient cash flow from operations or that future borrowing will be available . as of december 31 , 2013 , our ratio of funded debt less qualified cash to ebitda was 4.4 times , within the covenant in our debt agreements which limits this ratio to 5.25 times for the year ended december 31 , 2013. for more information on this non-gaap measure , please refer to the section set forth below “ non-gaap financial measures ” . sealy integration our sealy acquisition is significant , and we may not be able to successfully integrate and combine the operations , personnel and technology of sealy with our operations . because of the size and complexity of sealy 's business , if we do not successfully manage integration , we may experience interruptions in our business activities , a deterioration in our employee and customer relationships , increased costs of integration and harm to our reputation , all of which could have a material adverse effect on our business , financial condition and results of operations . we may also experience difficulties in combining corporate cultures , maintaining employee morale and retaining key employees . the integration may also impose substantial demands on our management . there is no assurance that improved operating results will be achieved as a result of the sealy acquisition or that the businesses of sealy and tempur-pedic will be successfully integrated in a timely manner . gross margins our gross margin is primarily impacted by the relative amount of net sales between our business segments . the sealy segment operates at a significantly lower gross margin than the tempur north america and tempur international segments . if sealy 's net sales increase as a percentage of net sales , our gross margin will be negatively impacted . additionally , our tempur north america gross margin has historically been lower than that of our tempur international segment . our gross margin is also impacted by fixed cost leverage ; the cost of raw materials ; operational efficiency ; product , channel and geographic mix ; volume incentives offered to certain retail accounts ; and costs associated with new product introductions . future increases in raw material prices could have a negative impact on our gross margin if we do not raise prices to cover increased cost . our gross margin can also be impacted by our operational efficiencies , including the particular levels of utilization in our manufacturing facilities . if we increase our net sales significantly the effect of this operating leverage could have a significant positive impact on our gross margin . conversely , if we experience significant decreases in our net sales , the effect of this operating deleverage could have a significant negative impact on our gross margin . our margins are also impacted by the growth in our retail channel as sales in our retail channel are at wholesale prices whereas sales in our direct channel are at retail prices . in 2014 , we expect gross margin to benefit from cost synergies and leverage , offset by investments in new products and foreign exchange . floor model shipments will be elevated in the first half of 2014 as we complete our new product roll-outs . story_separator_special_tag during the full year 2013 , we also recorded royalty income , net of royalty expense , of $ 13.7 million and equity income in earnings of unconsolidated affiliates of $ 4.4 million . our royalty income is based on sales of sealy® and stearns & foster® branded products by various licensees and is offset by royalty expenses we pay to other entities for the use of their names on our sealy branded products . our equity income in earnings of unconsolidated affiliates represents our 50.0 % interest in the earnings of our asia-pacific joint ventures whose purpose is to develop markets for sealy branded products . during the full year 2013 , we incurred $ 18.7 million of transaction expenses and $ 25.9 million of integration expenses in connection with the sealy acquisition . during the full year 2012 , we incurred $ 8.9 million of transaction expenses and $ 3.7 million of integration expenses in connection with the sealy acquisition . year ended december 31 , 2012 compared to year ended december 31 , 2011 operating income decreased $ 92.2 million , or 27.1 % , and was primarily impacted by the factors discussed above . interest expense , net replace_table_token_10_th year ended december 31 , 2013 compared to the year ended december 31 , 2012 interest expense , net , increased $ 92.0 million , or 489.4 % . in 2013 , we incurred $ 19.9 million of incremental interest expense and fees on the senior notes and 2012 credit agreement for the period prior to march 18 , 2013 , commitment fees associated with financing for the closing of the sealy acquisition , and write off of deferred financing costs associated with the 2011 credit facility . in addition , we incurred $ 8.7 million in prepayment fees related to the refinancing of our term b facility in the second quarter of 2013. the remaining increase was due to higher debt levels as a result of the sealy acquisition . 39 year ended december 31 , 2012 compared to the year ended december 31 , 2011 interest expense , net , increased $ 6.9 million , or 58.0 % . the increase in interest expense was primarily attributable to an increase in our debt outstanding as of december 31 , 2012 compared to our debt outstanding as of december 31 , 2011 and an increase in our effective interest rate . our debt levels increased in anticipation of the sealy acquisition , which occurred on march 18 , 2013. income before income taxes replace_table_token_11_th year ended december 31 , 2013 compared to year ended december 31 , 2012 income before income taxes decreased $ 101.2 million , or 44.2 % . this decrease was a result of the factors discussed above . year ended december 31 , 2012 compared to year ended december 31 , 2011 income before income taxes decreased $ 99.2 million , or 30.2 % . this decrease was a result of the factors discussed above . income taxes replace_table_token_12_th income tax provision includes income taxes associated with taxes currently payable and deferred taxes , and includes the impact of net operating losses for certain of our foreign operations . year ended december 31 , 2013 compared to year ended december 31 , 2012 our income tax provision decreased $ 73.3 million and our effective tax rate decreased 15.0 % . during 2012 , we recorded $ 48.1 million of additional income tax expense related to our undistributed earnings from non-u.s. operations , which increased our effective tax rate by 21.0 % . this was recorded as deferred income tax expense in 2012 and a deferred tax liability at december 31 , 2012. during 2013 , we undertook a taxable transaction in which we recognized current taxable income based on the earnings of certain of our foreign subsidiaries . the resulting income tax payable was approximately $ 51.7 million . consequently , we reclassified the $ 48.1 million deferred tax liability recorded at december 31 , 2012 to current tax payable at december 31 , 2013 and recognized an incremental $ 3.6 million current income tax expense in 2013. year ended december 31 , 2012 compared to year ended december 31 , 2011 our income tax provision increased $ 13.6 million and our effective tax rate increased 20.3 % .we had made no historical provision for u.s. federal and or state income tax and foreign withholdings on our undistributed earnings from non-u.s. operations because we intended to reinvest such earnings indefinitely outside of the united states . during 2012 , we changed the classification of our undistributed earnings to reflect a change in management 's strategic objectives that could require the repatriation of foreign earnings . as a result of this change , we recognized $ 48.1 million of additional income tax expense in 2012 to record the applicable u.s. deferred income tax liability . we repatriated non-u.s. cash holdings upon the closing of the proposed sealy acquisition . 40 tempur north america segment summary replace_table_token_13_th year ended december 31 , 2013 compared to year ended december 31 , 2012 tempur north america net sales decreased $ 54.3 million , or 5.6 % . the decline was driven by a decrease in bedding net sales of $ 51.9 million , or 5.9 % . retail channel net sales decreased $ 30.9 million , or 3.5 % . direct channel net sales also decreased $ 27.0 million , or 35.4 % . during the first half of 2013 , tempur north america decreased advertising expenses to better align with lower net sales . we believe this reduction in advertising had a negative impact on the retail and direct channel net sales . retail net sales decreased in the first half of 2013 as compared to the prior year due to continued competition and decreased advertising spend , but retail net sales stabilized in the second half of 2013 as we implemented additional strategic initiatives
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | debt service our debt increased to $ 1,836.5 million as of december 31 , 2013 from $ 1,025.0 million as of december 31 , 2012. our debt as of december 31 , 2012 included $ 375.0 million of senior notes issued in december 2012 to finance a portion of the cost of the sealy acquisition . the increase in debt is due to funding of the 2012 credit agreement in conjunction with the closing of the sealy acquisition , partially offset by the payoff of the remaining balance under the 2011 credit facility . after giving effect to $ 74.5 million in borrowings under the revolver portion of the 2012 credit agreement and letters of credit outstanding of $ 22.9 million , total availability under the revolver was $ 252.6 million as of december 31 , 2013. refer to note 5 , “ debt ” , in our consolidated financial statements included in part ii , item 8 for further discussion of our debt . as of december 31 , 2013 , we were in compliance with all of the financial covenants in our debt agreements . the table below sets forth the calculation of our compliance with the covenant in the 2012 credit agreement that requires that we maintain a ratio of less than 5.25 times of consolidated funded debt less qualified cash to adjusted ebitda from october 1 , 2013 through december 31 , 2013. during 2014 , we are required to maintain this ratio at less than : 5.00 times through march 31 , 2014 ; 4.75 times through june 30 , 2014 ; and 4.50 times through december 31 , 2014. both consolidated funded debt and adjusted ebitda are terms that are not recognized under u.s. gaap and do not purport to be alternatives to net income as a measure of operating performance or total debt . under the terms of our consolidated interest coverage ratio covenant , we are required to maintain a ratio greater than 3.00 times adjusted ebitda to adjusted interest expense . as of december 31 , 2013 , our consolidated interest coverage ratio was 4.0 times . in the first quarter of 2014 , we will be required to pay $ 21.9
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our manufacturing segment sales depend on industry demand for new railcars , which is driven by overall economic conditions and the demand for railcar transportation of various products , such as coal , steel products , minerals , cement , motor vehicles , forest products and agricultural commodities . our manufacturing segment sales are also affected by competitive market pressures that impact our market share , the prices for our railcars and by the types of railcars sold . our manufacturing segment revenues also include revenues from major railcar rebuilds and lease rental payments received with respect to railcars under operating leases . our corporate and other revenue sources include parts sales and , through september 30 , 2015 , revenues from our repair and maintenance business that was sold in september 2015. we generally manufacture railcars under firm orders from our customers . we recognize revenue , when ( 1 ) we complete the individual railcars , ( 2 ) the railcars are accepted by the customer following inspection , ( 3 ) the risk of any damage or other loss with respect to the railcars passes to the customer and ( 4 ) title to the railcars transfers to the customer . deliveries include new and used cars sold , cars built and contracted under operating leases and rebuilt cars . we value used railcars received at their estimated fair market value . revenues derived from a single sales contract that contains multiple products and services are allocated based on the relative fair value of each item to be delivered and recognized in accordance with the applicable revenue recognition criteria for the specific unit of accounting . the variable purchase patterns of our customers and the timing of completion , delivery and customer acceptance of railcars may cause our revenues and income from operations to vary substantially each quarter , which will result in significant fluctuations in our quarterly results . cost of sales our cost of sales includes the cost of raw materials such as aluminum and steel , as well as the cost of finished railcar components , such as castings , wheels , truck components and couplers , and other specialty components . our cost of sales also includes labor , utilities , freight , manufacturing depreciation and other operating costs . factors that have affected our cost of sales include the cost of steel and aluminum and the cost of railcar components , which have been impacted by the increase in industry demand . as we expanded , although we strove to reduce manufacturing costs at our manufacturing facilities , our cost of sales has been negatively impacted by production inefficiencies and idle capacity as we entered into new railcar markets and invested in diversifying our product portfolio . a portion of the contracts covering our backlog at december 31 , 2016 are fixed-rate contracts . therefore , if material costs were to increase , we will likely not be able to pass on these increased costs to our customers . we manage material price increases by locking in prices where possible . operating income ( loss ) operating income ( loss ) represents revenues less cost of sales , gain on sale of railcars available for lease , gain on sale of railcar repair and maintenance services business , selling , general and administrative expenses , and restructuring and impairment charges . results of operations year ended december 31 , 2016 compared to year ended december 31 , 2015 revenues our consolidated revenues for the year ended december 31 , 2016 were $ 523.7 million compared to $ 772.9 million for the year ended december 31 , 2015. manufacturing segment revenues for the year ended december 31 , 2016 were $ 516.1 million compared to $ 745.7 million for the year ended december 31 , 2015. the decrease in manufacturing segment revenues for 2016 compared to 2015 reflects the 38 % decrease in the number of railcars delivered , partially offset by a higher mix of new versus rebuilt railcars . corporate and other revenues for the year ended december 31 , 2016 were $ 7.7 million compared to $ 27.1 million for the year ended december 31 , 2015 , which for the year ended december 31 , 2015 included revenue from our repair and maintenance business that was sold in september 2015 . 20 gross profit our consolidated gross profit margin was 7.7 % for the year ended december 31 , 2016 compared to 10.7 % for the year ended december 31 , 2015. our consolidated gross profit for the year ended december 31 , 2016 was $ 40.2 million compared to $ 82.7 million for the year ended december 31 , 2015 , reflecting a decrease in gross profit from our manufacturing segment of $ 39.8 million and a decrease in gross profit from corporate and other of $ 2.7 million . the 38 % decline in railcar deliveries in 2016 contributed a $ 38.3 million decrease in gross profit in our manufacturing segment and production inefficiencies , net of a favorable sales mix of cars sold , contributed to a $ 2.8 million decrease in gross profit in our manufacturing segment . product warranty expense was $ 1.4 million lower for the year ended december 31 , 2016 compared to the same period last year . the decrease in gross profit for corporate and other for the year ended december 31 , 2016 compared to the year ended december 31 , 2015 reflects the sale of the company 's repair and maintenance business , which was partially offset by a $ 2.6 million decrease in postretirement benefit plan costs due to the settlement with our hourly retirees . story_separator_special_tag the credit agreement has both affirmative and negative covenants , including , without limitation , the maximum consolidated net leverage ratio requirement and limitations on indebtedness , liens and investments . the credit agreement also provides for customary events of default . as of december 31 , 2016 and 2015 , we had no borrowings under the revolving credit facility ( as in effect on such date ) . as of december 31 , 2016 and 2015 , we had $ 5.7 million and $ 6.9 million , respectively , in outstanding letters of credit under the revolving credit facility ( as in effect on such date ) and therefore had $ 44.3 million and $ 43.1 million , respectively , available for borrowing under the revolving credit facility . our restricted cash and restricted certificates of deposit balance was $ 6.0 million as of december 31 , 2016 and $ 6.9 million as of december 31 , 2015 , and consisted of cash and certificates of deposit used to collateralize standby letters of credit with respect to performance guarantees and to support our worker 's compensation insurance claims . the decrease in restricted cash balances as of december 31 , 2016 compared to december 31 , 2015 was a result of decreases in standby letters of credit with respect to performance guarantees and our corresponding obligation to collateralize them . the standby letters of credit outstanding as of december 31 , 2016 are scheduled to expire at 24 various dates through january 31 , 2018. we expect to establish restricted cash balances and restricted certificates of deposit in future periods to minimize bank fees related to standby letters of credit . based on our current level of operations and known changes in planned volume based on our backlog , we believe that our operating cash flows and our cash balances , together with amounts available under our revolving credit facility , will be sufficient to meet our expected liquidity needs . our long-term liquidity is contingent upon future operating performance and our ability to continue to meet financial covenants under our revolving credit facility and any other indebtedness . we may also require additional capital in the future to fund working capital as demand for railcars increases , payments for contractual obligations , organic growth opportunities , including new plant and equipment and development of railcars , joint ventures , international expansion and acquisitions , and these capital requirements could be substantial . we historically provided pension and retiree welfare benefits to certain salaried and hourly employees upon their retirement . benefits under our pension plans are now frozen and will not be impacted by increases due to future service and compensation increases . the most significant assumptions used in determining our net periodic benefit costs are the discount rate used on our pension and postretirement welfare obligations and expected return on pension plan assets . as of december 31 , 2016 , our benefit obligation under our defined benefit pension plans was $ 53.3 million , which exceeded the fair value of plan assets by $ 6.8 million . we made no contributions to our defined benefit pension plans during 2016 and are not required to make any contributions to our defined benefit pension plans in 2017. the pension protection act of 2006 provides for changes to the method of valuing pension plan assets and liabilities for funding purposes as well as minimum funding levels . our defined benefit pension plans are in compliance with the minimum funding levels established in the pension protection act . funding levels will be affected by future contributions , investment returns on plan assets , growth in plan liabilities and interest rates . assuming that the plans are fully funded as that term is defined in the pension protection act , we will be required to fund the ongoing growth in plan liabilities on an annual basis . a substantial portion of our $ 72.9 million postretirement benefit plan obligation as of december 31 , 2015 related to an expired settlement agreement with the union representing employees at our and our predecessors ' johnstown manufacturing facilities . on march 25 , 2016 , we made a one-time payment of $ 31.7 million to settle our postretirement benefit obligation for our hourly retirees , resulting in a pre-tax gain of $ 14.3 million ( net of plaintiffs ' attorneys ' fees of $ 1.3 million ) . as of december 31 , 2016 , our benefit obligation under our postretirement benefit plan was $ 6.2 million , which exceeded the fair value of plan assets by $ 6.2 million . we made contributions to our postretirement benefit plan of $ 0.5 million for salaried retirees during 2016 and expect to make $ 0.4 million in contributions to our postretirement benefit plan in 2017 for salaried retirees . as a result of the settlement payment , we have no further postretirement benefit obligation for hourly retirees . based upon our operating performance and capital requirements , we may , from time to time , be required to raise additional funds through additional offerings of our common stock and through long-term borrowings . there can be no assurance that long-term debt , if needed , will be available on terms attractive to us , or at all . furthermore , any additional equity financing may be dilutive to stockholders and debt financing , if available , may involve restrictive covenants . our failure to raise capital if and when needed could have a material adverse effect on our results of operations and financial condition . contractual obligations the following table summarizes our contractual obligations as of december 31 , 2016 , and the effect that these obligations would be expected to have on our liquidity and cash flow in future periods : replace_table_token_5_th 25 material and component purchases consist of non-cancelable agreements with suppliers to purchase materials used in the manufacturing process . the estimated
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows the following table summarizes our net cash provided by or used in operating activities , investing activities and financing activities for the years ended december 31 , 2016 , 2015 and 2014 : replace_table_token_6_th operating activities . our net cash provided by or used in operating activities reflects net income or loss adjusted for non-cash charges and changes in operating assets and liabilities . cash flows from operating activities are affected by several factors , including fluctuations in business volume , contract terms for billings and collections , the timing of collections on our contract receivables , processing of bi-weekly payroll and associated taxes , and payments to our suppliers . as some of our customers accept delivery of new railcars in train-set quantities , variations in our sales lead to significant fluctuations in our operating profits and cash from operating activities . we do not usually experience business credit issues , although a payment may be delayed pending completion of closing documentation . our net cash provided by operating activities for the year ended december 31 , 2016 was $ 0.2 million compared to net cash used in operating activities of $ 65.7 million for the year ended december 31 , 2015. our net cash provided by operating activities for the year ended december 31 , 2016 reflects decreases in working capital , including a $ 17.1 million decrease in inventory and a $ 15.9 million decrease in accounts receivable , which were offset by the cash payment of $ 31.6 million and payment of plaintiffs ' attorneys ' fees of $ 1.3 million for settlement of the postretirement benefit obligation for our hourly retirees . additionally , at december 31 , 2016 we had an income tax receivable of $ 13.3 million , most of which related to the carryback claim of our 2016 federal net taxable loss , which will be carried back against the 2015 tax year .
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the following is a summary of key performance information and events : results of operations are summarized as follows for the periods indicated ( in thousands ) : replace_table_token_6_th income from continuing operations of $ 2.63 per share , diluted , for the year ended december 31 , 2017 compared to $ 1.27 per share , diluted , for the same period in 2016. o the company reduced amic 's deferred tax asset valuation allowance by $ 20.3 million at december 31 , 2017 primarily due to an increase in projected future income and associated utilization of federal net operating losses . no such adjustment was recorded for the years ended december 31 , 2016 or 2015. o income taxes for the years ended december 31 , 2017 and 2016 , include income tax benefits of $ 11.6 million and $ 3.9 million , respectively , on worthless stock deductions representing the company 's tax basis on its unrecovered investments in those subsidiaries . o as a result of the tax act , the company recorded a deferred income tax expense of $ 9.4 million due to the re-measurement of deferred tax assets , liabilities and related valuation allowance . consolidated investment yields ( on an annualized basis ) of 3.2 % in 2017 compared to 2.7 % in 2016 ; and book value of $ 28.98 per common share at december 31 , 2017 compared to $ 25.53 at december 31 , 2016. the following is a summary of key performance information by segment : the specialty health segment reported $ 13.2 million of income before taxes for the year ended december 31 , 2017 compared to $ 7.2 million for the comparable period in 2016. o premiums earned increased 17.8 % or $ 27.5 million for the year ended december 31 , 2017 over the comparable period in 2016. short term medical premiums increased $ 9.7 million , and fixed indemnity limited benefit premiums increased $ 36.7 million as a result of the growing demand for these products and new significant distribution relationships . premium increases in these lines were partially offset by reduced premium volume in occupational accident business following the sale of accident insurance services , inc. , our primary producer of occupational accident business , in 2016 , other lines in run-off , and dental business . o underwriting experience , as indicated by its u.s. gaap combined ratios , for the specialty health segment are as follows for the years indicated ( in thousands ) : replace_table_token_7_th ( a ) loss ratio represents insurance benefits claims and reserves divided by premiums earned . ( b ) expense ratio represents net commissions , administrative fees , premium taxes and other underwriting expenses divided by premiums earned . ( c ) the combined ratio is equal to the sum of the loss ratio and the expenses ratio . o although the loss ratios in 2017 are lower than in the comparable periods in 2016 , the expense ratios are higher in 2017 because of changes in the mix of products within the specialty health segment and as a result of the reallocation of certain fixed costs from the medical stop-loss segment to the specialty health segment as the premium volume of one segment shrinks and the other one grows . income before taxes from the group disability , life and dbl segment increased $ 0.4 million in 2017 compared to prior year results primarily due to lower claims in the short and long term disability and group term life lines , partially offset by lower income from the international line due to run-off of that line of business ; the individual life , annuities and other segment reported losses before income taxes of $ 0.5 million in 2017 compared with losses of $ 2.5 million in 2016. the losses in 2016 were related to the accelerated amortization of deferred costs in connection with the assumption of certain ceded life and annuity policies for which there are no minimal amounts in 2017 ; the medical stop-loss segment reported income before taxes of $ 2.8 million for the year ended december 31 , 2017 as compared to income before taxes of $ 16.7 million for the year ended december 31 , 2016. the reduction in income in 2017 in the medical stop-loss segment is principally due to the sale of risk solutions and exit from the medical stop-loss business . premiums earned and amounts recorded for benefits , claims and reserves in the medical stop-loss segment represent the activity of the medical stop-loss business in run-off ; loss before tax from the corporate segment for the year ended december 31 , 2017 decreased $ 0.7 million over the same period in 2016 primarily due to changes in share-based compensation , consulting , legal and accounting expenses ; and premiums by principal product for the years indicated are as follows ( in thousands ) : replace_table_token_8_th replace_table_token_9_th information pertaining to the company 's business segments is provided in note 18 of notes to consolidated financial statements included in item 8. critical accounting policies the accounting and reporting policies of the company conform to u.s. gaap . the preparation of the consolidated financial statements in conformity with u.s. gaap requires the company 's management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes . actual results could differ from those estimates . a summary of the company 's significant accounting policies and practices is provided in note 1 of the notes to the consolidated financial statements included in item 8 of this report . management has identified the accounting policies described below as those that , due to the judgments , estimates and assumptions inherent in those policies , are critical to an understanding of the company 's consolidated financial statements and this management 's discussion and analysis . story_separator_special_tag in these instances , management will assess the quality of the data sources , the underlying assumptions and the reasonableness of the broker quotes based on the current market information available . to determine if an exception represents an error , management will often have to exercise judgment . procedures to resolve an exception vary depending on the significance of the security and its related class , the frequency of the exception , the risk of material misstatement , and the availability of information for the security . these procedures include , but are not limited to : ( i ) a price challenge process with the vendor ; ( ii ) pricing from a different vendor ; ( iii ) a reasonableness review ; and ( iv ) a change in price based on better information , such as an actual market trade , among other things . management considers all facts and relevant information obtained during the above procedures to determine the proper classification of each security in the fair value hierarchy . declines in value of securities available-for-sale that are judged to be other-than-temporary are determined based on the specific identification method . the company reviews its investment securities regularly and determines whether other-than-temporary impairments have occurred . the factors considered by management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include , but are not limited to : the length of time and extent to which the fair value has been less than cost ; the company 's intent to sell , or be required to sell , the debt security before the anticipated recovery of its remaining amortized cost basis ; the financial condition and near-term prospects of the issuer ; adverse changes in ratings announced by one or more rating agencies ; subordinated credit support ; whether the issuer of a debt security has remained current on principal and interest payments ; current expected cash flows ; whether the decline in fair value appears to be issuer specific or , alternatively , a reflection of general market or industry conditions including the effect of changes in market interest rates . if the company intends to sell a debt security , or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis , the entire difference between the security 's amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to total other-than-temporary impairment losses in the consolidated statement of income . if a decline in fair value of a debt security is judged by management to be other-than-temporary and ; ( i ) the company does not intend to sell the security ; and ( ii ) it is not more likely than not that it will be required to sell the security prior to recovery of the security 's amortized cost , the company assesses whether the present value of the cash flows to be collected from the security is less than its amortized cost basis . to the extent that the present value of the cash flows generated by a debt security is less than the amortized cost basis , a credit loss exists . for any such security , the impairment is bifurcated into ( a ) the amount of the total impairment related to the credit loss , and ( b ) the amount of the total impairment related to all other factors . the amount of the other-than-temporary impairment related to the credit loss is recognized by a charge to total other-than-temporary impairment losses in the consolidated statement of income , establishing a new cost basis for the security . the amount of the other-than-temporary impairment related to all other factors is recognized in other comprehensive income ( loss ) . it is reasonably possible that further declines in estimated fair values of such investments , or changes in assumptions or estimates of anticipated recoveries and or cash flows , may cause further other-than-temporary impairments in the near term , which could be significant . in assessing corporate debt securities for other-than-temporary impairment , the company evaluates the ability of the issuer to meet its debt obligations and the value of the company or specific collateral securing the debt position . for mortgage-backed securities where loan level data is not available , the company uses a cash flow model based on the collateral characteristics . assumptions about loss severity and defaults used in the model are primarily based on actual losses experienced and defaults in the collateral pool . prepayment speeds , both actual and estimated , are also considered . the cash flows generated by the collateral securing these securities are then determined with these default , loss severity and prepayment assumptions . these collateral cash flows are then utilized , along with consideration for the issue 's position in the overall structure , to determine the cash flows associated with the mortgage-backed security held by the company . in addition , the company evaluates other asset-backed securities for other-than-temporary impairment by examining similar characteristics referenced above for mortgage-backed securities . the company evaluates u.s. treasury securities and obligations of u.s. government corporations , u.s. government agencies , and obligations of states and political subdivisions for other-than-temporary impairment by examining the terms and collateral of the security . equity securities may experience other-than-temporary impairment in the future based on the prospects for full recovery in value in a reasonable period of time and the company 's ability and intent to hold the security to recovery . if a decline in fair value is judged by management to be other-than-temporary or management does not have the intent or ability to hold a security , a loss is recognized by a charge to total other-than-temporary impairment losses in the consolidated statement of income . for the purpose of other-than-temporary impairment evaluations ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows the company had $ 26.5 million and $ 22.0 million of cash and cash equivalents as of december 31 , 2017 and 2016 , respectively . operating activities provided $ 28.6 million of cash . investment activities provided $ 27.6 million of cash , primarily the result of sales of investment securities , partially offset by $ 12.3 million net cash outflow to acquire petpartners . financing activities utilized $ 51.7 million of cash , of which $ 46.4 million was utilized for treasury share purchases . the company repurchased 2,289,502 shares of its common stock . of that amount , 703,000 shares were repurchased in private transactions for an aggregate cost of $ 14.0 million ; 1,385,118 shares were repurchased for an aggregate cost of $ 27.7 million pursuant to the terms of a tender offer ; and the remaining shares were repurchased in the open market .. the tender offer was fully funded through corporate liquidity . at december 31 , 2017 , the company had $ 544.1 million of insurance liabilities that it expects to ultimately pay out of current assets and cash flows from future business . if necessary , the company could utilize the cash received from maturities and repayments of its fixed maturity investments if the timing of claim payments associated with the company 's insurance resources does not coincide with future cash flows . for the year ended december 31 , 2017 , cash received from the maturities and other repayments of fixed maturities was $ 28.4 million . the company believes it has sufficient cash to meet its currently anticipated business requirements over the next twelve months including working capital requirements and capital investments . balance sheet the company had receivables from reinsurers of $ 380.6 million at december 31 , 2017 compared to $ 440.3 million at december 31 , 2016. all of such reinsurance receivables are from highly rated companies or are adequately secured .
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our modular building segment was profitable in the 2019 fiscal year mainly due a large contract that is approximately 55 % complete . this segment carries a strong backlog into 2020 that will provide a great start to our 2020 fiscal year . our tools segment did not have a strong year financially but did sign an oem agreement that has the potential to increase their sales in the 2020 fiscal year . our consolidated balance sheet indicates a stable financial position as of november 30 , 2019. despite showing a net loss from continuing operations of $ ( 1,420,000 ) for the 2019 fiscal year we were able to decrease our total liabilities by $ 735,000 compared to the 2018 fiscal year . our total borrowings were reduced by $ 1,241,000 in fiscal year 2019 compared to fiscal year 2018. we expect to have access to capital as needed throughout 2020 through the sale of inventory and from the use our line of credit . at november 30 , 2019 we had $ 2,421,470 available on our line of credit . despite the continued losses , our banking relationship has remained positive through transparency and continued communication . our working capital remained strong around $ 6,204,000 in the 2019 fiscal year with a current ratio of 2.19 , up eight points from 2018. we continue to put emphasis on reducing our inventory to more manageable levels to decrease carrying costs , implement lean manufacturing practices and improve our inventory turnover . we do not foresee liquidity issues within the next twelve months . critical accounting policies our significant accounting policies are described in note 1 “ summary of significant accounting policies ” to our financial statements in “ item 8. financial statements and supplementary data ” of this report . critical accounting policies are those that we believe are both important to the portrayal of our financial condition and results and require our most difficult , subjective or complex judgments , often as a result of the need to make estimates about the effect of matters that are inherently uncertain . we believe that the following represents the most critical accounting policies and estimates used in the preparation of our consolidated financial statements . inventories inventories are stated at the lower of cost or net realizable value , and cost is determined using the standard costing method . management monitors the carrying value of inventories using inventory control and review processes that include , but are not limited to , sales forecast review , inventory status reports , and inventory reduction programs . we record inventory write downs to net realizable value based on expected usage information for raw materials and historical selling trends for finished goods . if the assumptions made by management do not occur , we may need to record additional write downs . revenue recognition effective december 1 , 2018 we adopted the financial accounting standards board ( “ fasb ” ) accounting standards codification ( “ asc ” ) subtopic 606 , revenue from contracts with customers ( “ asc 606 ” ) , using the modified retrospective adoption method . the adoption of asc 606 had no impact on prior year or previously disclosed amounts . in accordance with asc 606 , revenue is measured based on consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract . 12 our revenues primarily result from contracts with customers . the major sources of revenue for the agricultural products and tools segments are farm equipment , service parts related to farm equipment and steel cutting tools and inserts . the agricultural products and tools segments generally execute short-term contracts that contain a single performance obligation – the delivery of product to the common carrier . we recognize revenue for the production and sale of farm equipment , service parts and cutting tools upon shipment of the goods . shipment of the goods is the point in time when risk of ownership and title pass to the buyer . all sales are made to authorized dealers whose application for dealer status has been approved and who have been informed of general sales policies . any changes in our terms are documented in the most recently published price lists . pricing is fixed and determinable according to our published equipment and parts price lists . title to all equipment and parts sold pass to the buyer upon delivery to the carrier and is not subject to a customer acceptance provision . proof of the passing of title is documented by the signing of the delivery receipt by a representative of the carrier . post shipment obligations are limited to any claim with respect to the condition of the equipment or parts . the agricultural products and tools segments each typically require payment in full 30 days after the ship date . to take advantage of program discounts , some customers pay deposits up front . any deposits received are considered unearned revenue and increase contract liabilities . in certain circumstances , upon the customer 's written request , we may recognize revenue when production is complete , and the goods are ready for shipment . at the buyer 's request , we will bill the buyer upon completing all performance obligations , but before shipment . the buyer dictates that we ship the goods per their direction from our manufacturing facility , as is customary with this type of agreement , in order to minimize shipping costs . story_separator_special_tag moreover , oem blower revenue of approximately $ 262,000 in the 2018 fiscal year was not repeated in the 2019 fiscal year as our oem blower customer elected not to purchase any blowers from us in fiscal 2019 due to slow-moving inventory on their dealer lots relating to poor agricultural market conditions . while we saw decreased demand in the above product lines , we saw increased demand in dump boxes , land maintenance equipment , bale processors and beet equipment for a combined $ 1,500,000 increase in sales . at the end of our third fiscal quarter of 2019 our year to date sales were down 18.4 % in this segment . our strongest fourth quarter since the 2014 fiscal year brought us to within approximately 6 % of the 2018 fiscal year 's total . gross profit percentage for the 2019 fiscal year was 16.3 % compared to 17.4 % for the 2018 fiscal year . our decreased gross profit percentage is due largely to a decrease in workforce efficiency . with the absence of steady demand for portable feed equipment , our most efficient equipment to build , we have struggled to gain operational efficiencies that are generally gained by continued production of a single product . our efficiency has also been affected by the diversion of direct labor for operational changes that will have long-term benefits . we have partially completed warehouse reorganization , which we expect will improve inventory accuracy and decrease travel time for material handlers and machine operators . we have also implemented a material review board to decrease scrap and eliminate production errors . we believe our continued operational improvement projects will put us in a position to meet increased demand in an improved agriculture economy . our agricultural products segment 's operating expenses for the 2019 fiscal year were $ 3,796,000 compared to $ 4,959,000 for the 2018 fiscal year , a decrease of $ 1,163,000 , or 23.5 % . in the 2018 fiscal year , operating expenses included one-time non-cash expenses of $ 216,000 for the impairment of our west union facility and $ 375,000 for the impairment of goodwill related to our miller pro product line . these expenses were not repeated in the 2019 fiscal year . we also saw decreased selling expense in the 2019 fiscal year due to decreased commissions as a result of lower sales along with refocused marketing techniques . our new marketing efforts include a shift to social media from more expensive print advertisements along with less participation in trade shows in the 2019 fiscal year . this segment 's operating expenses for the 2019 fiscal year were 28.1 % of sales compared to 34.6 % of sales for the 2018 fiscal year . total loss from operations for our agricultural products segment during the 2019 fiscal year was $ ( 1,599,000 ) compared to an operating loss of $ ( 2,462,000 ) for the 2018 fiscal year , a decrease in loss of $ 863,000. modular buildings . our modular buildings segment 's net sales for the 2019 fiscal year were $ 7,260,000 compared to $ 3,109,000 for the 2018 fiscal year , an increase of $ 4,151,000 , or 133.5 % . the increase in sales was attributable to increased operating lease activity in 2019 and progress on a $ 8.5 million project . gross profit for the 2019 fiscal year was 16.1 % compared to 12.0 % during the 2018 fiscal year . the increase in gross profit was largely due to increased revenue providing more variable margin to cover fixed costs . operating expenses for the 2019 fiscal year were 13.3 % of sales compared to 30.2 % for the 2018 fiscal year . total income from operations from our modular buildings segment during the 2019 fiscal year was $ 208,000 compared to an operating loss of $ ( 566,000 ) in the 2018 fiscal year , a decrease in loss of $ 774,000. tools . our tools segment 's net sales for the 2019 fiscal year were $ 2,121,000 compared to $ 2,274,000 for the 2018 fiscal year , a decrease of $ 153,000 , or 6.7 % . the decrease is primarily due to the loss of a large volume customer near the end of the first fiscal quarter of 2018. this segment began integration of an oem product line at the end of the fourth fiscal quarter of 2019 that is expected to more than make up for the loss of this customer . gross profit for the 2019 fiscal year was 26.4 % compared to 28.2 % for the 2018 fiscal year . our decreased gross margin for the twelve months is largely due to lower revenues with less variable margin to absorb fixed costs . operating expenses were $ 666,000 for the 2019 fiscal year compared to $ 709,000 for the 2018 fiscal year , a decrease of $ 43,000 , or 6.1 % . this decrease is largely related to reduction of commission expense as the result of lower sales levels . results of operations – discontinued operations during the third quarter of the 2016 fiscal year , we made the decision to exit the pressure vessels industry . on march 29 , 2018 we disposed of the remaining assets for $ 1,500,000. we did not have net sales from our pressurized vessels segment in the 2019 or 2018 fiscal year . we continued to incur expenses during the 2018 fiscal year due to holding the facility in dubuque , iowa . our pretax loss in the 2018 fiscal year was $ ( 67,000 ) . 15 trends and uncertainties we are subject to a number of trends and uncertainties that may affect our short-term or long-term liquidity , sales revenues , and operations . similar to other farm equipment manufacturers , we are affected by items unique to the farm industry , including fluctuations in farm income resulting from the change
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources our main source of funds during the 2019 fiscal year was cash generated by operating activities , which was primarily from the sale and reduction of inventory . we did have substantial positive cash flow from investing activities related to the sale of our west union facility as well . we used approximately $ 447,000 of cash to update facilities and equipment which includes software and hardware related to information technology advances , transportation equipment , and manufacturing equipment . we have a bank midwest credit facility consisting of a $ 5,000,000 revolving line of credit , pursuant to which we had borrowed $ 2,578,530 , with $ 2,421,470 remaining , as of november 30 , 2019 , and one term loan , which had an outstanding principal balance of $ 2,435,993 as of november 30 , 2019. the revolving line of credit is being used for working capital purposes . we also had a loan relating to our production facility in west union , iowa , from the iowa finance authority , which was paid in full in connection with the sale of the west union facility on december 14 , 2018. our loans require us to comply with various covenants , including maintaining certain financial ratiosand obtaining prior written consent from bank midwest for any investment in , acquisition of , or guaranty relating to another business or entity .
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this discussion and analysis contains forward-looking statements that are based upon current expectations and involve risks , assumptions and uncertainties . you should review the “ risk factors ” section of this annual report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements described in the following discussion and analysis . overview we are a medical device company that develops and commercializes innovative platforms for performing minimally invasive surgical procedures in the brain under direct , intra-procedural mri guidance . our principal product platform is our clearpoint system , which is in commercial use and is used to perform minimally invasive surgical procedures in the brain . the clearpoint system utilizes intra-procedural mri to guide the procedures and are designed to work in a hospital 's existing mri suite . we believe that this product platform delivers better patient outcomes , enhances revenue potential for both physicians and hospitals , and reduces costs to the healthcare system . in 2010 , we received regulatory clearance from the fda to market our clearpoint system in the u.s. for general neurological procedures . in 2011 , we also obtained ce marking approval for our clearpoint system , which enables us to sell our clearpoint system in the european union . substantially all our product revenues for the years ended december 31 , 2019 and 2018 relate to sales of our clearpoint system products . we have financed our operations and internal growth primarily through the sale of equity securities , the issuance of convertible and other secured notes , and license arrangements . we have incurred significant losses since our inception in 1998 as we have devoted substantial efforts to research and development . as of december 31 , 2019 , we had accumulated losses of approximately $ 113 million . we may continue to incur operating losses as we expand our clearpoint system platform and our business generally . factors which may influence future results of operations the following is a description of factors which may influence our future results of operations , and which we believe are important to an understanding of our business and results of operations . revenues in 2010 , we received 510 ( k ) clearance from the fda to market our clearpoint system in the u.s. for general neurological procedures . future revenues from sales of our clearpoint platform products and services are difficult to predict and may not be sufficient to offset our continuing research and development expenses and our increasing selling , general and administrative expenses . generating recurring revenues from the sale of functional neurosurgical products is an important part of our business model for our clearpoint system . we anticipate that , over time , recurring revenues will constitute an increasing percentage of our total revenues as we leverage installations of our clearpoint system to generate recurring sales of our functional neurosurgical products . our product revenues were approximately $ 9.5 million and $ 6.7 million for the years ended december 31 , 2019 and 2018 , respectively , and were almost entirely related to our clearpoint system . in addition , we expect that , over time , service revenues will constitute an increasing portion of our total revenues based on : ( a ) leveraging current and future installations of clearpoint systems , as discussed above , so as to result in an increase in functional neurosurgical service revenues ; and ( b ) increasing biologics and drug delivery service revenues should our customers in this space be successful in expansion of their clinical trials , and should we be successful in continuing to establish relationships with new biologic and drug delivery partners . our service revenues were approximately $ 1.7 million and $ 700,000 for the years ended december 31 , 2019 and 2018 , respectively . our revenue recognition policies are more fully described in the “ critical accounting policies and significant judgments and estimates ” section below . cost of revenues cost of revenues includes the direct costs associated with the assembly and purchase of components for functional neurosurgical products , drug delivery and biologic products , non-neurosurgical therapy products , and clearpoint capital equipment which we have sold , and for which we have recognized the revenue in accordance with our revenue recognition policy . cost of revenues also includes the allocation of manufacturing overhead costs and depreciation of loaned systems installed under our clearpoint placement program , as well as provisions for obsolete , impaired , or excess inventory . with the anticipated increases in the contribution to total revenues of sales of recurring products and services , as discussed above , we expect gross margin , as a percentage of total revenue , to increase over time . 41 research and development costs our research and development costs consist primarily of costs associated with the conceptualization , design , testing , and prototyping of our clearpoint system products . such costs include salaries , travel , and benefits for research and development personnel , including related share-based compensation ; materials and laboratory supplies in research and development activities ; consultant costs ; and licensing costs related to technology not yet commercialized . we anticipate that , over time , our research and development costs may increase as we : ( i ) continue to develop enhancements to our clearpoint system ; and ( ii ) seek to expand the application of our technological platforms . story_separator_special_tag we have not paid , and do not anticipate paying , cash dividends on shares of our common stock ; therefore , the expected dividend yield is assumed to be zero . research and development costs . costs related to research , design and development of products are charged to research and development expense as incurred . these costs include direct salary and employee benefit-related costs for research and development personnel , costs incurred under the terms of collaborative agreements , costs for materials used in research and development activities , and costs for outside services . results of operations comparison of the year ended december 31 , 2019 to the year ended december 31 , 2018 replace_table_token_1_th 44 revenue . total revenues were approximately $ 11.2 million and $ 7.4 million for the years ended december 31 , 2019 and 2018 , respectively . functional neurosurgery revenue , which consists of disposable product commercial sales related to cases utilizing the clearpoint system and related services , increased 29 % to $ 6.9 million during the year ended december 31 , 2019 from $ 5.3 million for the same period in 2018. the increase was due primarily to 801 cases utilizing our clearpoint neuro navigation system in 2019 , as compared to 670 such cases in 2018 , an increase of 20 % . the increase in sales was also influenced by two factors : ( a ) fda actions taken in early 2018 , that adversely affected third-party providers in the laser ablation space ; and ( b ) the introduction by a third-party provider of a new deep brain stimulation system that did not have approval for use in the mri suite for most of 2018. the fda actions were resolved by the affected third-parties , but not until the fourth quarter of 2018 , and the new deep brain stimulation system received fda clearance for use in the mri suite in the third quarter of 2018. there were no increases in functional neurosurgery product prices during 2019 that would be reasonably expected to affect a typical customer order . biologics and drug delivery revenues , which include sales of services related to customer-sponsored clinical trials utilizing the clearpoint system and of related disposable products , increased 116 % to $ 2.3 million for the year ended december 31 , 2019 , from $ 1.1 million for the same period in 2018. this increase was due primarily to an increase from 2018 to 2019 of : ( a ) approximately $ 839,000 , or 305 % , in biologics and drug delivery services ; and ( b ) approximately $ 543,000 , or 59 % , in biologics and drug delivery product sales . there were no increases in biologics and drug delivery product prices during 2019 that would be reasonably expected to affect a typical customer order . capital equipment revenue , consisting of sales of clearpoint reusable hardware and software , increased 147 % to $ 1.0 million for the year ended december 31 , 2019 , from $ 420,000 for the same period in 2018. revenues from this product line historically have varied from period to period . this increase was due primarily to an increase in the number of clearpoint systems sold . there were no increases in capital equipment product prices during the year ended december 31 , 2019 that would be reasonably expected to affect a typical customer order . capital equipment-related services , consisting of fees for capital equipment rental , service , installation , training and shipping , increased 59 % to $ 625,000 for the year ended december 31 , 2019 , from $ 393,000 for the same period in 2018. the increase was due primarily to an increase in service fee revenue . cost of revenues . cost of revenues was $ 3.8 million for the year ended december 31 , 2019 , representing gross margin of 66 % , compared to $ 2.4 million for the same period in 2018 , representing gross margin of 67 % . the slight decrease in gross margin was due primarily to an increased contribution from lower margin capital equipment sales in 2019 , when compared to 2018 , and to increased direct and indirect costs in 2019 , when compared to 2018. these factors were substantially offset by an increased contribution from sales of services , which bear higher margins relative to other lines of revenue . research and development costs . research and development costs were $ 2.9 million for the year ended december 31 , 2019 , compared to $ 2.3 million for the same period in 2018 , an increase of $ 612,000 , or 26 % . the increase was due primarily to increases in : ( a ) compensation costs , due primarily to increases in incentive compensation and headcount , of $ 207,000 ; ( b ) product and software development costs of $ 222,000 ; ( c ) intellectual property costs of $ 65,000 ; and ( d ) license fees of $ 76,000. sales and marketing expenses . sales and marketing expenses were $ 4.8 million for the year ended december 31 , 2019 , compared to $ 3.5 million for the same period in 2018 , an increase of $ 1.2 million , or 35 % . this increase was primarily due to a $ 1.0 million increase in compensation costs , attributable to increase in incentive-based compensation and headcount , both of which are commensurate with the increase in revenues from 2018 to 2019. general and administrative expenses . general and administrative expenses were $ 4.3 million for each of the years ended december 31 , 2019 and 2018. most general and administrative cost categories were not materially changed between 2018 and 2019 , with decreases in professional fees offset by increases in public company costs due to the uplisting of the exchange on which our common stock is traded
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources at december 31 , 2019 , we had cash and cash equivalent balances aggregating $ 5.7 million , resulting primarily from completion of the 2019 pipe discussed in note 8 to the consolidated financial statements included elsewhere in this annual report . net cash used in operating activities was $ 2.8 million and $ 4.6 million for the years ended december 31 , 2019 and 2018 , respectively . we have incurred net losses since its inception which has resulted in a cumulative deficit at december 31 , 2019 of approximately $ 113 million . since inception , we have financed our operations principally from the sale of equity securities , the issuance of notes payable and license arrangements . as a result , management historically has expressed substantial doubt as to the company 's ability to continue as a going concern . as discussed in note 8 to the consolidated financial statements included elsewhere in this annual report , in may 2019 , we entered into the 2019 pipe , resulting in proceeds of approximately $ 7.5 million , before deducting offering expenses aggregating approximately $ 94,000. in addition , as discussed in note 11 to the consolidated financial statements included elsewhere in this annual report , in january 2020 , we entered into a securities purchase agreement with two investors under which we issued to such investors an aggregate principal amount of $ 17.5 million of floating rate secured convertible notes ( the “ 2020 secured notes ” ) . from the proceeds received from the issuance of the 2020 secured notes , which have a five-year term , we repaid and retired the 2010 junior secured notes payable that otherwise would have matured in october and november 2020. as a result , in management 's opinion , our cash and cash equivalent balances at december 31 , 2019 , when combined with the proceeds from issuance of the 2020 secured notes ( after repayment of the 2010 secured notes ) , are sufficient to support our operations for at least the next twelve months and to alleviate doubt as to our ability to continue as a going concern .
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the trust is not an oil and gas producer . rather , its oil and gas revenue is derived from retained perpetual non-participating oil and gas royalty interests . thus , in addition to being subject to fluctuations in response to the market prices for oil and gas , our oil and gas royalty revenues are also subject to decisions made by the owners and operators of the oil wells to which our royalty interests relate as to investments in and production from those wells . we monitor production reports by the oil and gas companies to assure that we are being paid the appropriate royalties . we review conditions in the agricultural industry in the areas in which our lands are located and seek to keep as much of our lands as possible under lease to local ranchers at competitive rates . in recent years , we have been successful at keeping over 96 % of our land subject to grazing leases . 9 results of operations the trust 's primary sources of income are revenue derived from sales of land , either for cash or a combination of cash and mortgage notes , and revenue derived from the trust 's land and mineral interests . 2013 compared to 2012 total operating and investing revenues in 2013 aggregated $ 44,121,079 , an increase of $ 11,514,188 , or 35.3 % , from the $ 32,606,891 of total operating and investing revenues recorded in 2012. this increase resulted primarily from increases in oil and gas royalty revenue , easements and sundry income , and land sales . these increases were partially offset by a decrease in interest income from notes receivable . earnings per sub-share certificate were $ 3.16 for 2013 compared to $ 2.20 in 2012. the trust purchased and retired 322,056 sub-shares during 2013 , leaving 8,473,202 sub-shares outstanding at december 31 , 2013. land sales in 2013 were $ 6,413,588 compared to $ 5,809,747 in 2012 , an increase of $ 603,841 , or 10.4 % . a total of 10,399 acres were sold in 2013 at an average price of $ 617 per acre , compared to 7,252 acres in 2012 at an average price per acre of $ 801. rentals , royalties and other income ( including interest on investments ) were $ 37,707,491 in 2013 compared to $ 26,797,144 in 2012 , an increase of 40.7 % . oil and gas royalty revenue in 2013 was $ 24,496,851 compared to $ 14,670,915 in 2012 , an increase of 67.0 % . oil royalty revenue was $ 19,930,212 and gas royalty revenue was $ 4,566,639 in 2013. crude oil production from trust royalty wells increased 60.6 % in 2013 from 2012. the average prices per royalty barrel of crude oil for 2013 and 2012 were $ 91.56 and $ 87.56 , respectively . total gas production increased 47.7 % , and the average price of gas increased by 10.6 % in 2013 compared to 2012. grazing lease income in 2013 was $ 494,210 compared to $ 488,694 in 2012. interest revenue ( including interest on investments ) was $ 496,243 in 2013 compared to $ 725,687 in 2012 , a decrease of 31.6 % . interest on notes receivable amounted to $ 484,238 in 2013 compared to $ 706,252 in 2012. at year end 2013 , notes receivable from land sales were $ 3,887,906 compared to $ 8,370,984 at year end 2012. interest on investments amounted to $ 12,005 in 2013 and $ 19,435 in 2012 , respectively . total principal cash payments on notes receivable were $ 4,483,078 in 2013 including $ 2,736,616 of prepaid principal . 10 easement and sundry income revenue in 2013 was $ 12,220,187 compared to $ 10,911,848 in 2012. the increase in easement and sundry income revenue was primarily attributable to increases in the amount of sundry income , sundry lease rental income , and , to a lesser extent , pole line easement income received in 2013 compared to 2012 due to an increase in drilling and exploration activity on land owned by the trust . these increases were partially offset by a decrease in seismic easement income . easement and sundry income is unpredictable and may vary significantly from period to period . taxes , other than income taxes , were $ 1,420,635 in 2013 compared to $ 941,757 in 2012. oil and gas production taxes were $ 1,259,287 in 2013 compared to $ 756,076 in 2012. ad valorem taxes were $ 99,984 in 2013 compared to $ 128,391 in 2012. all other expenses were $ 2,557,866 in 2013 compared to $ 2,342,248 in 2012 . 2012 compared to 2011 total operating revenues and investing revenues in 2012 aggregated $ 32,606,891 , a decrease of $ 1,712,145 , or 5.0 % , from the $ 34,319,036 of total operating revenues and investing revenues recorded in 2011. this decrease resulted primarily from decreases in land sales , interest income from notes receivable and , to a much lesser extent , modest decreases in oil and gas royalty revenue and grazing lease revenue . these decreases were partially offset by an increase in easements and sundry income . earnings per sub-share certificate were $ 2.20 for 2012 compared to $ 2.21 in 2011. the trust purchased and retired 380,156 sub-shares during 2012 , leaving 8,795,258 sub-shares outstanding at december 31 , 2012. land sales in 2012 were $ 5,809,747 compared to $ 11,873,112 in 2011 , a decrease of $ 6,063,365 , or 51.1 % . a total of 7,252 acres were sold in 2012 at an average price of $ 801 per acre , compared to 31,446 acres in 2011 at an average price per acre of $ 378. rentals , royalties and other income ( including interest on investments ) were $ 26,797,144 in 2012 compared to $ 22,445,924 in 2011 , an increase of 19.4 % . oil and gas royalty revenue in 2012 was $ story_separator_special_tag the trust is not an oil and gas producer . rather , its oil and gas revenue is derived from retained perpetual non-participating oil and gas royalty interests . thus , in addition to being subject to fluctuations in response to the market prices for oil and gas , our oil and gas royalty revenues are also subject to decisions made by the owners and operators of the oil wells to which our royalty interests relate as to investments in and production from those wells . we monitor production reports by the oil and gas companies to assure that we are being paid the appropriate royalties . we review conditions in the agricultural industry in the areas in which our lands are located and seek to keep as much of our lands as possible under lease to local ranchers at competitive rates . in recent years , we have been successful at keeping over 96 % of our land subject to grazing leases . 9 results of operations the trust 's primary sources of income are revenue derived from sales of land , either for cash or a combination of cash and mortgage notes , and revenue derived from the trust 's land and mineral interests . 2013 compared to 2012 total operating and investing revenues in 2013 aggregated $ 44,121,079 , an increase of $ 11,514,188 , or 35.3 % , from the $ 32,606,891 of total operating and investing revenues recorded in 2012. this increase resulted primarily from increases in oil and gas royalty revenue , easements and sundry income , and land sales . these increases were partially offset by a decrease in interest income from notes receivable . earnings per sub-share certificate were $ 3.16 for 2013 compared to $ 2.20 in 2012. the trust purchased and retired 322,056 sub-shares during 2013 , leaving 8,473,202 sub-shares outstanding at december 31 , 2013. land sales in 2013 were $ 6,413,588 compared to $ 5,809,747 in 2012 , an increase of $ 603,841 , or 10.4 % . a total of 10,399 acres were sold in 2013 at an average price of $ 617 per acre , compared to 7,252 acres in 2012 at an average price per acre of $ 801. rentals , royalties and other income ( including interest on investments ) were $ 37,707,491 in 2013 compared to $ 26,797,144 in 2012 , an increase of 40.7 % . oil and gas royalty revenue in 2013 was $ 24,496,851 compared to $ 14,670,915 in 2012 , an increase of 67.0 % . oil royalty revenue was $ 19,930,212 and gas royalty revenue was $ 4,566,639 in 2013. crude oil production from trust royalty wells increased 60.6 % in 2013 from 2012. the average prices per royalty barrel of crude oil for 2013 and 2012 were $ 91.56 and $ 87.56 , respectively . total gas production increased 47.7 % , and the average price of gas increased by 10.6 % in 2013 compared to 2012. grazing lease income in 2013 was $ 494,210 compared to $ 488,694 in 2012. interest revenue ( including interest on investments ) was $ 496,243 in 2013 compared to $ 725,687 in 2012 , a decrease of 31.6 % . interest on notes receivable amounted to $ 484,238 in 2013 compared to $ 706,252 in 2012. at year end 2013 , notes receivable from land sales were $ 3,887,906 compared to $ 8,370,984 at year end 2012. interest on investments amounted to $ 12,005 in 2013 and $ 19,435 in 2012 , respectively . total principal cash payments on notes receivable were $ 4,483,078 in 2013 including $ 2,736,616 of prepaid principal . 10 easement and sundry income revenue in 2013 was $ 12,220,187 compared to $ 10,911,848 in 2012. the increase in easement and sundry income revenue was primarily attributable to increases in the amount of sundry income , sundry lease rental income , and , to a lesser extent , pole line easement income received in 2013 compared to 2012 due to an increase in drilling and exploration activity on land owned by the trust . these increases were partially offset by a decrease in seismic easement income . easement and sundry income is unpredictable and may vary significantly from period to period . taxes , other than income taxes , were $ 1,420,635 in 2013 compared to $ 941,757 in 2012. oil and gas production taxes were $ 1,259,287 in 2013 compared to $ 756,076 in 2012. ad valorem taxes were $ 99,984 in 2013 compared to $ 128,391 in 2012. all other expenses were $ 2,557,866 in 2013 compared to $ 2,342,248 in 2012 . 2012 compared to 2011 total operating revenues and investing revenues in 2012 aggregated $ 32,606,891 , a decrease of $ 1,712,145 , or 5.0 % , from the $ 34,319,036 of total operating revenues and investing revenues recorded in 2011. this decrease resulted primarily from decreases in land sales , interest income from notes receivable and , to a much lesser extent , modest decreases in oil and gas royalty revenue and grazing lease revenue . these decreases were partially offset by an increase in easements and sundry income . earnings per sub-share certificate were $ 2.20 for 2012 compared to $ 2.21 in 2011. the trust purchased and retired 380,156 sub-shares during 2012 , leaving 8,795,258 sub-shares outstanding at december 31 , 2012. land sales in 2012 were $ 5,809,747 compared to $ 11,873,112 in 2011 , a decrease of $ 6,063,365 , or 51.1 % . a total of 7,252 acres were sold in 2012 at an average price of $ 801 per acre , compared to 31,446 acres in 2011 at an average price per acre of $ 378. rentals , royalties and other income ( including interest on investments ) were $ 26,797,144 in 2012 compared to $ 22,445,924 in 2011 , an increase of 19.4 % . oil and gas royalty revenue in 2012 was $
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity the trust 's principal sources of liquidity are its revenues from oil and gas royalties , lease rentals and receipts of interest and principal payments on the notes receivable arising from its sales of land . in the past , these sources have generated more than adequate amounts of cash to meet the trust 's needs and , in the opinion of management , should continue to do so in the foreseeable future . off-balance sheet arrangements the trust has not engaged in any off-balance sheet arrangements . tabular disclosure of contractual obligations as of december 31 , 2013 , the trust 's known contractual obligations were as follows : replace_table_token_4_th effects of inflation we do not believe that inflation has had a material impact on our operating results . we can not assure you , however , that future increases in our costs will not occur or that any such increases that may occur will not adversely affect our results of operations . 12 critical accounting policies and estimates the preparation of financial statements in conformity with accounting principles generally accepted in the united states of america ( gaap ) requires management to make estimates and assumptions that affect the reported amounts ofassets and liabilities at the date of the financial statements .
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for each share of class a common stock issued by evolent health , inc. , the company received a corresponding class a common unit from evolent health llc in exchange for contributing the issuance proceeds to evolent health llc . as a result of the class a common stock and class a common units of evolent health llc issued during the august 2017 primary , the company 's economic interest in evolent health llc increased from 96.1 % to 96.6 % immediately following the august 2017 primary , and , accordingly , the company reclassified a portion of its non-controlling interests into shareholders ' equity attributable to evolent health , inc. 41 2017 secondary offerings certain affiliates of tpg , the advisory board , upmc and ptolemy capital ( together , the “ investor stockholders ” ) have an existing exchange right that allows receipt of newly-issued shares of the company 's class a common stock in exchange ( a “ class b exchange ” ) for an equal number of shares of the company 's class b common stock ( which are subsequently canceled ) and an equal number of evolent health llc 's class b common units . the class b common units of evolent health llc received by the company from relevant investor stockholders are simultaneously exchanged for an equivalent number of class a common units of evolent health llc , and evolent health llc cancels the class b common units of evolent health llc it receives in the class b exchange . the class b exchanges and subsequent cancellation of class b common units of evolent health llc result in an increase in the company 's economic interest in evolent health llc . the company did not receive any proceeds from class b exchanges or the sale of class a common stock in the secondary offerings described below . the investor stockholders initiated several class b exchanges as part of various secondary offerings during 2017 , thus increasing the company 's economic interest in evolent health llc , as discussed below . june 2017 secondary offering in june 2017 , the company completed a secondary offering of 4.5 million shares of its class a common stock at a price to the underwriters of $ 25.87 per share ( the “ june 2017 secondary ” ) . the shares sold in the june 2017 secondary consisted of 0.7 million existing shares of the company 's class a common stock owned and held by certain investor stockholders and 3.8 million newly issued shares of the company 's class a common stock received by certain investor stockholders pursuant to class b exchanges . as a result of these class b exchanges and evolent health llc 's cancellation of its class b common units during the june 2017 secondary , the company 's economic interest in evolent health llc increased from 90.5 % to 96.1 % immediately following the june 2017 secondary , and , accordingly , the company reclassified a portion of its non-controlling interests into shareholders ' equity attributable to evolent health , inc. may 2017 secondary offering in may 2017 , the company completed a secondary offering of 7.0 million shares of its class a common stock at a price to the underwriters of $ 24.30 per share ( the “ may 2017 secondary ” ) . the shares were sold by the investor stockholders and certain management selling stockholders ( together with the investor stockholders , the “ selling stockholders ” ) . the shares sold in the may 2017 secondary consisted of 3.1 million existing shares of the company 's class a common stock owned and held by the selling stockholders , 3.8 million newly issued shares of the company 's class a common stock received by certain investor stockholders pursuant to class b exchanges and 0.1 million shares issued upon the exercise of options by certain management selling stockholders . as a result of these class b exchanges and evolent health llc 's cancellation of its class b common units during the may 2017 secondary , the company 's economic interest in evolent health llc increased from 84.9 % to 90.5 % immediately following the may 2017 secondary , and , accordingly , the company reclassified a portion of its non-controlling interests into shareholders ' equity attributable to evolent health , inc. march 2017 secondary offering in march 2017 , the company completed a secondary offering of 7.5 million shares of its class a common stock at a price to the underwriters of $ 19.53 per share ( the “ march 2017 secondary ” ) . the shares sold in the march 2017 secondary consisted of 3.1 million existing shares of the company 's class a common stock owned and held by the investor stockholders and 4.4 million newly issued shares of the company 's class a common stock received by certain investor stockholders pursuant to class b exchanges . as a result of these class b exchanges and evolent health llc 's cancellation of its class b common units during the march 2017 secondary , the company 's economic interest in evolent health llc increased from 77.4 % to 83.9 % immediately following the march 2017 secondary , and , accordingly , the company reclassified a portion of its non-controlling interests into shareholders ' equity attributable to evolent health , inc. in connection with the march 2017 secondary , the underwriters exercised , in full , their option to purchase an additional 1.1 million shares of class a common stock ( the “ march 2017 option to purchase additional shares ” ) from the investor stockholders at a price of $ 19.53 per share . the march 2017 option to purchase additional shares closed on may 1 , 2017 . story_separator_special_tag subsequent to our 2015 annual impairment testing , our common stock price declined significantly , reaching our historic low in the first quarter of 2016. during the three months ended march 31 , 2016 , our common stock traded between $ 8.48 and $ 12.32 , or an average common stock price of $ 10.33 compared to an average common stock price of $ 19.51 and $ 14.73 during the three month periods ended september 30 , 2015 , and december 31 , 2015 , respectively . a sustained decline in our common stock price and the resulting impact on our market capitalization is one of several qualitative factors we consider each quarter when evaluating whether events or changes in circumstances indicate it is more likely than not that a potential goodwill impairment exists . we concluded that the further decline in common stock price observed during the first quarter of 2016 did represent a sustained decline and that triggering events occurred during the period requiring an interim goodwill impairment test as of march 31 , 2016. as such , we performed a step 1 impairment test of our goodwill as of march 31 , 2016. step 1 results to determine the implied fair value for our single reporting unit , we used both a market approach and income approach , as described above . in our march 31 , 2016 , step 1 test , our most sensitive assumption for purposes of the market approach was our estimate of the control premium , and the most sensitive assumption related to the income approach , other than the projected cash flows , was the discount rate . as of march 31 , 2016 , our single reporting unit failed the step 1 analysis as we determined that its implied fair value was less than its carrying value based on the weighting of the fair values determined under both the market and income approaches . as fair value was less than carrying value , we performed a step 2 test to determine the implied fair value of our goodwill . step 2 results in our march 31 , 2016 , step 2 test , the fair value of all assets and liabilities was estimated , including our tangible assets ( corporate trade name , customer relationships and technology ) , for the purpose of deriving an estimate of the implied fair value of goodwill . the implied fair value of goodwill was then compared to the carrying amount of goodwill , resulting in an impairment charge of $ 160.6 million on our consolidated statements of operations . the impairment was driven primarily by the sustained decline in our share price as our estimates of our future cash flows and the control premium have remained consistent , combined with an increase in the discount rate period over period . as noted above , our determination of fair value used a weighting of the fair values determined under both the market and income approaches , with the market approach driving the significant reduction in overall firm value and related impairment of goodwill . 46 on october 31 , 2016 , the company performed its annual goodwill impairment review for fiscal year 2016 . based on our qualitative assessment , we did not identify sufficient indicators of impairment that would suggest fair value was below carrying value . as a result , a quantitative step 1 goodwill impairment analysis was not required . as of december 31 , 2016 , evolent assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of its goodwill below its carrying amount and require an additional impairment test . the company determined that there have been no such indicators . therefore , it was unnecessary to perform an interim goodwill impairment assessment as of december 31 , 2016 . intangible assets , net intangible assets are reviewed for impairment if circumstances indicate the company may not be able to recover the asset 's carrying value . examples of such circumstances include a significant decrease in the market price of a long-lived asset , a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition , or a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset . the company evaluates recoverability by determining whether the undiscounted cash flows expected to result from the use and eventual disposition of that asset or group exceed the carrying value at the evaluation date . if the undiscounted cash flows are not sufficient to cover the carrying value , the company measures an impairment loss as the excess of the carrying amount of the long-lived asset or group over its fair value . the estimation of future undiscounted cash flows expected to result from the use and disposition of an asset or group requires significant judgment and future results may vary from current assumptions . as discussed above , we identified a triggering event and performed a quantitative analysis over the carrying value of our goodwill balance during the fourth quarter of 2017. identification of the triggering event also triggered an impairment analysis of the carrying value of our intangible asset group . in conjunction with the impairment testing of the carrying value of our goodwill , we performed an analysis to determine whether the carrying amount of our intangible asset group was recoverable . we performed a quantitative analysis , which required management to compare the total pre-tax , undiscounted future cash flows of the intangible asset group to the current carrying amount . the total undiscounted cash flows included only the future cash flows that are directly associated with and that were expected to arise as a result of the use and eventual disposal of the asset group . based on our quantitative analysis , we determined that the
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows used in investing activities of $ 12.3 million in 2017 , primarily relate to purchases of property and equipment of $ 27.8 million , payment of a $ 20.0 million implementation funding loan , purchases of restricted investments of $ 3.8 million and cash paid to acquire intangible technology assets of $ 3.7 million . these amounts were partially offset by the maturity of investment securities in the amount of $ 44.2 million . cash flows used in investing activities of $ 96.7 million in 2016 were due primarily to cash outflows for the acquisitions of valence health and aldera for $ 53.7 million and $ 17.5 million , respectively . we also paid $ 11.5 million in connection with our acquisition of vestica 's assets and $ 3.0 million for our equity investment in gpac . purchases of property and equipment and restricted investments resulted in further cash outflows of $ 15.5 million and $ 5.0 million , respectively , during the year . these amounts were partially offset by the maturity of investment securities in the amount of $ 9.4 million . cash flows used in investing activities of $ 43.7 million in 2015 were due primarily to the investment of a portion of our ipo proceeds into held-to-maturity investments of $ 54.2 million and the purchase of $ 6.5 million of property and equipment , partially offset by cash acquired upon the consolidation of evolent health llc of $ 13.1 million and maturities of investments of $ 4.0 million . financing activities cash flows provided by financing activities of $ 165.6 million in 2017 were primarily related to proceeds of $ 166.9 million from the august 2017 primary . stock option exercises during the quarter resulted in additional proceeds of $ 4.1 million , which were partially offset by $ 1.3 million of taxes withheld and paid for vests of restricted stock units . the inflows were further offset by a $ 4.2 million reduction in the amount of restricted cash held on behalf of our partners to process pbm and other claims .
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our custom data center , or c1 , customers typically are large enterprises with significant it expertise and specific it requirements , including financial institutions , big four accounting firms and the world 's largest global internet companies . our colocation , or c2 , customers consist of a wide range of organizations , including 67 major healthcare , telecommunications and software and web-based companies . our c3 cloud customers include both large organizations and smbs seeking to reduce their capital expenditures and outsource their it infrastructure on a flexible basis . examples of current c3 cloud customers include a global financial processing company , a u.s. government agency and an educational software provider . as a result of our diverse customer base , customer concentration in our portfolio is limited . as of december 31 , 2013 , only two of our more than 880 customers individually accounted for more than 3 % of our mrr , with no single customer accounting for more than 8 % of our mrr . in addition , approximately 40 % of our mrr was attributable to customers who use more than one of our 3cs products . our portfolio we operate 10 data centers located in seven states , containing an aggregate of approximately 3.8 million gross square feet of space ( approximately 92 % of which is wholly owned by us ) , including approximately 1.8 million basis-of-design raised floor square feet , which represents the total data center raised floor potential of our existing data center facilities . this represents the maximum amount of space in our existing buildings that could be leased following full build-out , depending on the configuration that we deploy . as of december 31 , 2013 , this space included approximately 690,000 raised floor operating net rentable square feet , or nrsf , plus approximately 1.1 million square feet of additional raised floor in our development pipeline , of which approximately 188.000 nrsf is expected to become operational by december 31 , 2014. our facilities collectively have access to over 500 mw of gross utility power with 390 mw of available utility power . we believe such access to power gives us a competitive advantage in redeveloping data center space , since access to power is usually the most limiting and expensive component in data center redevelopment . key operating metrics the following sets forth definitions for our key operating metrics . these metrics may differ from similar definitions used by other companies . monthly recurring revenue ( mrr ) . we calculate mrr as monthly contractual revenue under signed leases as of a particular date , which includes revenue from our c1 , c2 and c3 rental and cloud and managed services activities , but excludes customer recoveries , deferred set-up fees , variable related revenues , non-cash revenues and other one-time revenues . mrr does not include the impact from booked-not-billed leases as of a particular date , unless otherwise specifically noted . annualized rent . we define annualized rent as mrr multiplied by 12. rental churn . we define rental churn as the mrr impact from a customer completely departing our platform in a given period compared to the total mrr at the beginning of the period . leasable raised floor . we define leasable raised floor as the amount of raised floor square footage that we have leased plus the available capacity of raised floor square footage that is in a leasable format as of a particular date and according to a particular product configuration . the amount of our leasable raised floor may change even without completion of new redevelopment projects due to changes in our configuration of c1 , c2 and c3 product space . percentage ( % ) leased raised floor . we define percentage leased raised floor as the square footage that is subject to a signed lease for which billing has commenced as of a particular date compared to leasable raised floor as of that date , expressed as a percentage . booked-not-billed . we define booked-not -billed as our customer leases that have been signed , but for which lease payments have not yet commenced . 68 factors that may influence future results of operations and cash flows revenue . our revenue growth will depend on our ability to maintain the historical occupancy rates of leasable raised floor , lease currently available space , lease new capacity that becomes available as a result of our development and redevelopment activities , attract new customers and continue to meet the ongoing technological requirements of our customers . as of december 31 , 2013 , we had in place customer leases generating revenue for approximately 92 % of our leasable raised floor . our ability to grow revenue also will be affected by our ability to maintain or increase rental , cloud and managed services rates at our properties . future economic downturns , regional downturns or downturns in the technology industry could impair our ability to attract new customers or renew existing customers ' leases on favorable terms , or at all , and could adversely affect our customers ' ability to meet their obligations to us . negative trends in one or more of these factors could adversely affect our revenue in future periods , which would impact our results of operations and cash flows . we also at times may elect to reclaim space from customers in a negotiated transaction where we believe that we can redevelop and or re-lease that space at higher rates , which may cause a decrease in revenue until the space is re-leased . leasing arrangements . as of december 31 , 2013 , 20 % of our mrr came from customers which individually occupied more than 6,600 square feet of space and which had metered power . story_separator_special_tag for the years ended december 31 , 2013 and 2012 we incurred $ 0.1 million and $ 0.9 million , respectively , in costs related to the examination of proposed acquisitions . acquisition-related costs are expensed in the periods in which the costs are incurred and the services are received . interest expense . interest expense for the year ended december 31 , 2013 was $ 18.7 million compared to $ 25.1 million for the year ended december 31 , 2012. the decrease of $ 6.4 million , or 26 % , was due to a reduction in the weighted average interest rate , and higher capitalized interest during the period , partially offset by a $ 37.2 million increase in our average debt balance . during the second quarter of 2013 , we replaced our $ 440 million secured credit facility with a $ 575 million unsecured credit facility . in addition the interest rate spread over libor on the unsecured credit facility was 165 basis points lower than the secured credit facility . the average debt balance for the year ended december 31 , 2013 was $ 510.6 million , with a weighted average interest rate , including the effect of interest rate swaps and amortization of deferred financing costs , of 4.48 % . this compared to an average debt balance of $ 473.4 million , with a weighted average interest rate , including the effect of interest rate swaps and amortization of deferred financing costs , of 5.84 % . interest expense was reduced by $ 0.3 million and $ 0.3 million , respectively , during the years ended december 31 , 2013 and december 31 , 2012 , as a result of non-cash mark-to-market adjustments associated with the derivative liability reported on our balance sheet . interest capitalized in connection with our redevelopment activities during the years ended december 31 , 2013 and december 31 , 2012 was $ 4.0 million and $ 2.2 million , respectively . on october 15 , 2013 , we closed our ipo which generated net proceeds of approximately $ 279 million after underwriting discounts and commissions . the proceeds were used to repay amounts borrowed on our $ 350 million unsecured revolving credit facility . other expense/income . other expense for the year ended december 31 , 2013 was $ 3.4 million compared to other expense of $ 1.2 million for the year ended december 31 , 2012. the increase in other expense of $ 2.3 million , was due to higher write-offs of unamortized deferred financing costs in connection with the replacement of our secured credit facility with an unsecured credit facility and an asset securitization which we did not pursue . gain on sale of real estate . in 2012 , we recognized a gain on sale of a vacant data center facility of $ 0.9 million . net income ( loss ) . a summary of the components of the increase in net income of $ 13.6 million for the year ended december 31 , 2013 as compared to the year ended december 31 , 2012 is as follows : $ change ( in millions ) increase in revenues , net of property operating costs , real estate taxes and insurance $ 21.9 increase in general and administrative expense ( 3.2 ) increase in depreciation and amortization ( 12.4 ) decrease in transaction costs 0.8 decrease in restructuring charges 3.3 decrease in interest expense net of interest income 6.4 increase in other expense ( 2.3 ) decrease in gain on sale of real estate ( 0.9 ) increase in net income $ 13.6 75 year ended december 31 , 2012 compared to year ended december 31 , 2011 changes in revenues and expenses for the year ended december 31 , 2012 compared to the year ended december 31 , 2011 are summarized below : replace_table_token_31_th * not applicable for comparison revenues . total revenues for the year ended december 31 , 2012 were $ 145.8 million compared to $ 130.4 million for the year ended december 31 , 2011. the increase of $ 15.4 million , or 12 % , was primarily due to organic growth in our customer base . the increase of $ 19.0 million , or 16 % , in combined rental and cloud and managed services revenues was primarily related to newly leased space as well as increases in rents from previously leased space , net of downgrades at renewal and rental churn , and included the $ 2.7 million negative impact from our reclaiming space in july 2012 from a customer in our atlanta-suwanee data center , as described above . as of december 31 , 2012 , our data centers were 86 % leased based on leasable raised floor of approximately 484,000 square feet , with an average annualized rent of $ 340 per leased raised floor square foot including cloud and managed services revenue , or $ 303 per leased raised floor square foot excluding cloud and managed services revenue . as of december 31 , 2011 , our data centers were 74 % leased based on leasable raised floor of approximately 549,000 square feet , with an average annualized rent of $ 294 per leased raised floor square foot including cloud and managed services revenue , or $ 262 per leased raised floor square foot excluding cloud and managed services revenue . the decrease in leasable raised floor was due to the reclaiming of space from a customer in our atlanta-suwanee data center , as described above , and the consolidation of our former new york 76 facility into our jersey city facility , partially offset by the acquisition of our sacramento data center in december 2012 and the addition of raised floor square footage from our redevelopment activities . the increase in average annualized rent per leased raised floor square foot as of december 31 , 2012 compared to december 31 , 2011 was primarily due to
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows replace_table_token_42_th year ended december 31 , 2013 compared to year ended december 31 , 2012 cash flow provided by operating activities was $ 60.1 million for the year ended december 31 , 2013 , compared to $ 35.1 million for the year ended december 31 , 2012. the increased cash flow provided by operating activities of $ 25.0 million was primarily due to an increase in cash operating income of $ 28.9 million , partially offset by a decrease in cash flow associated with net changes in working capital of $ 3.9 million primarily relating to changes in accounts payable , accrued liabilities , accrued interest on member advances , restricted cash and rent and other receivables . 89 cash flow used for investing activities decreased by $ 26.1 million to $ 168.8 million for the year ended december 31 , 2013 , compared to $ 194.9 million for the year ended december 31 , 2012. the decrease was primarily due to lower net cash outflow for the acquisitions of $ 42.1 million , partially offset by an increase in cash paid for capital expenditures primarily related to redevelopment of our atlanta-metro and richmond data centers of $ 14.4 million . these expenditures include capitalized soft costs such as interest , payroll and other costs to redevelop properties , which were , in the aggregate , $ 12.6 million and $ 8.9 million for the year ended december 31 , 2013 and 2012 , respectively . in 2012 , we received $ 1.5 million of proceeds from the sale of our topeka , kansas facility . cash flow provided by financing activities was $ 105.7 million for the year ended december 31 , 2013 , compared to $ 160.7 million for the year ended december 31 , 2012. the decrease was primarily due to a $ 91.9 million of equity financing provided by general atlantic llc in 2012 , partially offset by an increase of $ 37.6 in net borrowings under our former and new credit facilities in 2013 in order to acquire and redevelop our data centers .
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” results of operations for the years ended december 31 , 2017 and december 31 , 2016 revenues were $ 16,524,225 for the year ended december 31 , 2017 compared to $ 15,652,168 for the same period in 2016. the increase was primarily a result of a general increase in number of customers , partially offset by a large $ 2.7 million single international order that occurred during the 2016 period . cost of sales . cost of sales was $ 6,290,879 for the year ended december 31 , 2017 compared to $ 5,970,058 for the same period in 2016. the increase is a result of increased costs due to higher sales volume and includes $ 87,749 for the year ended 2017 compared to $ 17,282 for the year ended 2016 , respectively , to cost of sales for inventory reserve allowance to adjust the net realizable carrying value of inventory on hand , offset by reductions in material costs from higher volume purchases and more favorable pricing of raw materials and systems components in 2017 compared to 2016. gross profit . gross profit was $ 10,233,346 for the year ended december 31 , 2017 compared to $ 9,682,110 for the same period in 2016. the gross profit margin was 61.9 % for the years ended december 31 , 2017 and 2016. operating expenses . net operating expense was $ 8,926,829 for the year ended december 31 , 2017 compared to $ 7,555,784 for the same period in 2016 , an increase of $ 1,371,045. the year over year increases were due to expanding staffing levels , annual increases in payroll and benefits for staff of $ 546,046 , sales and marketing expansion of $ 417,000 , new research and development work of $ 200,000 , and it infrastructure upgrades of $ 53,000 , as well as additional costs associated with our becoming a public company , sec registration and up-listing to nasdaq plus increased investor relations totaling $ 170,000. income tax ( benefit ) expense . income tax benefit was ( $ 2,505,292 ) for the year ended december 31 , 2017 , reflecting a reversal of our previously established valuation allowance , partially offset by the effect of a change in the federal income tax rate applied to our deferred tax assets and miscellaneous state income taxes . income tax expense was $ 204,890 for the year ended december 31 , 2016 , reflecting miscellaneous state income taxes . other income ( expense ) . other income ( expense ) was ( $ 549,527 ) for the year ended december 31 , 2017 as compared to $ 26,448 for the year ended december 31 , 2016. the change was primarily attributable to the write-down of our investment in mrec . net income . net income was $ 3,262,282 for the year ended december 31 , 2017 compared to $ 2,050,022 for the same period in 2016. the increase in net income resulted from an increase in revenues and an increase in income tax benefit , partially offset by an increase in operating expenses and an increase in other expense as noted in each respective section . 22 adjusted earnings before interest , taxes , depreciation and amortization ( aebitda ) explanation and use of non-gaap financial measures : earnings before interest , income taxes , depreciation and amortization and before other non-operating costs and income ( “ ebitda ” ) and adjusted ebitda are non-gaap measures . adjusted ebitda also includes non-cash stock option expense . other companies may calculate adjusted ebitda differently . the company calculates its adjusted ebitda to eliminate the impact of certain items it does not consider to be indicative of its performance and its ongoing operations . adjusted ebitda is presented herein because management believes the presentation of adjusted ebitda provides useful information to the company 's investors regarding the company 's financial condition and results of operations and because adjusted ebitda is frequently used by securities analysts , investors and other interested parties in the evaluation of companies in the company 's industry , several of which present ebitda and a form of adjusted ebitda when reporting their results . adjusted ebitda has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the company 's results as reported under u.s. gaap . adjusted ebitda should not be considered as an alternative for net ( loss ) income , cash flows from operating activities and other consolidated income or cash flows statement data prepared in accordance with u.s. gaap or as a measure of profitability or liquidity . a reconciliation of net income to adjusted ebitda is provided in the following table : replace_table_token_2_th story_separator_special_tag for capitalized labor and overhead . the company routinely evaluates the carrying value of inventory and provides reserves for slow moving or potentially obsolete inventory , when appropriate and reduces inventory to the lower of cost or market to reflect estimated net realizable value . as of december 31 , 2017 and 2016 , inventory reserves were $ 105,031 and $ 17,282 , respectively . investments in other companies minority investments in other companies are accounted for under the cost method of accounting because we do not have the ability to exercise significant influence over the companies ' operations . under the cost method of accounting , investments in private companies are carried at cost and are only adjusted for other-than-temporary declines in fair value and distribution of earnings . management regularly evaluates the recoverability of its investment based on the investee company 's performance and financial position . during the year ended december 31 , 2017 , we recognized an impairment loss of $ 613,241. during the year ended december 31 , 2016 , we did not recognize any losses due to other-than-temporary declines of the value of the investments . story_separator_special_tag if a tax benefit meets this criterion , it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50 % likely to be realized . management does not believe that there are any uncertain tax positions at december 31 , 2017 or 2016. the company is potentially subject to tax audits for its united states federal and arizona state income tax returns for tax years ended 2015 to 2017 and 2014 to 2017 , respectively ; however , earlier years may be subject to audit under certain circumstances . tax audits by their very nature are often complex and can require several years to complete . the tax cuts and jobs act ( the “ act ” ) was enacted on december 22 , 2017. the act reduces the u.s federal corporate tax rate from 35 % to 21 % . accordingly , the company has modified the value of the deferred tax assets and liabilities including the net operating loss carryover at december 31 , 2017. prior to enactment of the new tax reform , the company had total net deferred tax assets of $ 5,463,000 at december 31 , 2017. taking the new tax reform into consideration , the total net deferred tax assets was $ 2,710,000 at december 31 , 2017. we remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future , which is generally 21 % . however , we are still analyzing certain aspects of the act and refining our calculation , which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts . the amount recorded related to the remeasurement of our deferred tax balance was an expense of $ 1,376,000. the expense is included as a component of income tax expense . stock based compensation the company calculates the cost of awards of equity instruments based on the grant date fair value of the awards using the black-scholes-merton option pricing valuation model , which incorporates various assumptions including volatility , expected term and risk-free interest rates the expected term of the options is the estimated period of time until exercise and is determined using the sec 's safe harbor rules as we do not have sufficient historical experience of similar awards . expected stock price volatility is based on historical volatility of the company 's stock . the risk-free interest rate is based on the implied yield available on united states treasury zero-coupon issues with an equivalent remaining term . the estimated fair value of stock-based compensation awards and other options is amortized on a straight-line basis over the relevant vesting period . as share-based compensation expense is recognized based on awards ultimately expected to vest , it is reduced for estimated forfeitures . the company has elected to recognize forfeitures as they occur rather than estimating them at the time of grant . recent accounting pronouncements in may 2014 , the financial accounting standards board ( “ fasb ” ) issued guidance for revenue recognition for contracts , superseding the previous revenue recognition requirements , along with most existing industry-specific guidance . the guidance requires an entity to review contracts in five steps : 1 ) identify the contract , 2 ) identify performance obligations , 3 ) determine the transaction price , 4 ) allocate the transaction price , and 5 ) recognize revenue . the new standard will result in enhanced disclosures regarding the nature , amount , timing and uncertainty of revenue arising from contracts with customers . in august 2015 , the fasb issued guidance approving a one-year deferral , making the standard effective for reporting periods beginning after december 15 , 2017 , with early adoption permitted only for reporting periods beginning after december 15 , 2016. the adoption of this accounting standard will not have a material impact on the company 's financial position or results of operations . 26 in february 2016 , the fasb issued asu no . 2016-02 – “ leases ( topic 842 ) ” , which requires leases to put most leases on their balance sheets by recognizing lease assets and lease liabilities for those leases classified as operating leases under previous guidance . this asu will be effective for the company on january 1 , 2019 , with early adoption permitted . the company is currently in the process of assessing the impact of this asu on its financial statements . in january 2016 , the fasb issued asu 2016-01 , financial instruments - overall ( subtopic 825-10 ) : recognition and measurement of financial assets and financial liabilities ( “ asu 2016-01 ” ) , which requires that equity investments , except for those accounted for under the equity method or those that result in consolidation of the investee , be measured at fair value , with subsequent changes in fair value recognized in net income . however , an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment , if any , plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer . asu 2016-01 also impacts the presentation and disclosure requirements for financial instruments . asu 2016-01 is effective for public business entities for annual periods , and interim periods within those annual periods , beginning after december 15 , 2017. early adoption is permitted only for certain provisions . as the company wrote-down its investment in modern round to fair value in 2017 , the company believes that the adoption of asu 2016-01 will not have a material impact on its financial statements , however , the company will change from the cost method of accounting . we implemented all new accounting standards that are in effect and that may impact our financial statements . off-balance sheet
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources . liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements . the company had $ 5,080,445 and $ 3,703,579 cash and cash equivalents as of december 31 , 2017 and 2016 , respectively . working capital was $ 5,710.483 and $ 5,268,654 as of december 31 , 2017 and 2016 , respectively . net cash provided by operating activities was $ 2,652,101 and $ 1,754,880 for the year ended december 31 , 2017 and 2016 , respectively , resulting from an increase in net income and significant changes in working capital . net cash used in investing activities was $ 133,831 and $ 830,334 for the year ended december 31 , 2017 and 2016 , respectively . investing activities in 2017 consisted entirely of purchases of property and equipment , while investing activities in 2016 also including the investment in mrec and the asset purchase of a tool shop . net cash used in financing activities was $ 1,141,404 and $ 537,987 for the year ended december 31 , 2017 and 2016 , respectively . financing activities in 2017 consisted primarily of repurchases of stock options , warrants and treasury stock , while financing activities in 2016 consisted primarily of the repurchase of stock options .
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our approved and in-development products are designed to treat the spectrum of needs among patients who are managed by ent physicians for chronic sinusitis , one of the most prevalent chronic diseases in the united states and one of the most costly conditions for u.s. employers . chronic sinusitis patients include those needing and electing surgery , those who have not had sinus surgery and those that have had one or more surgeries but continue to suffer from symptoms . to address these patient groups , we are : marketing propel ® and propel ® mini , the first and only steroid releasing implants approved by the u.s. food and drug administration , or fda , for use in patients undergoing surgery for chronic sinusitis . propel has been proven in a meta-analysis of prospective , multicenter , randomized , controlled , double-blind clinical studies to improve surgical outcomes , demonstrating a 35 % reduction in the need for postoperative oral steroid and surgical intervention . inserted by a physician into the ethmoid sinuses following sinus surgery , the self-expanding implants are designed to conform to and hold open the surgically enlarged sinus , while gradually releasing an anti-inflammatory steroid over a period of approximately 30 days , before being fully absorbed into the body . marketing propel mini for chronic sinusitis patients undergoing frontal sinus surgery . based on results from the progress clinical study , designed to evaluate the safety and efficacy of propel mini when placed in the frontal sinuses following surgery , propel mini demonstrated a statistically significant 38 % relative reduction in the need for postoperative interventions compared to surgery alone . received fda approval to market of propel ® contour , formerly referred to as nova , in february 2017 , a steroid releasing implant designed to facilitate treatment of the frontal and maxillary sinus ostia , or openings , of the dependent sinuses , which we believe represents an opportunity for procedures to be performed in operating rooms or in the office setting of care . propel contour has the potential to expand adoption of steroid releasing implants overall by providing physicians with a range of products needed to customize treatment based on their patients ' disease and anatomy . in particular , we believe propel contour 's lower profile , malleable delivery system will increase usage particularly in those patients whose frontal sinuses are more challenging to access . we announced results of the second cohort of patients in the progress study in may 2016. this phase of the progress study was an 80-patient prospective randomized blinded multicenter trial designed to assess the safety and efficacy of propel contour when placed in the frontal sinuses following opening of the sinus . the propel contour cohort demonstrated a statistically significant 65 % relative reduction in the need for post-operative interventions , such as the need for additional surgical procedures or need for oral steroid prescription , compared to surgery alone with standard post-operative care . 49 pursuing approval of resolve , a steroid releasing implant designed to provide a cost-effective , less invasive solution for patients that have had ethmoid sinus surgery yet suffer from recurrent sinus obstruction due to polyps . the resolve implant is designed to be placed in the ethmoid sinus in a procedure conducted in the physician 's office as an alternative to other treatment options such as further medical therapy or revision surgery . we have completed four studies of resolve in a total of 417 patients . in october 2016 , we announced the results of resolve ii , a phase iii trial of 300 patients to assess the safety and efficacy of the product . the resolve ii clinical study met both primary efficacy endpoints , reduction in nasal congestion and polyp burden . we plan to submit a new drug application in the first quarter of 2017 to seek regulatory approval from the fda to market the resolve product . we have expanded our sales organization and we intend to continue to grow our sales force in order to expand our communication of the benefits of our steroid releasing implants to our physician customers . we seek to grow our revenue by increasing the frequency of use of our products among current physician customers and also to add new physician users . components of our results of operations revenue all of our revenue is currently derived from sales of propel and propel mini . we expect our revenue to increase as we expand our sales , marketing and reimbursement infrastructure and increase awareness of our products . we also expect our revenue to fluctuate from quarter to quarter due to a variety of factors . in the first quarter , demand for our products may be impacted by adverse weather and by resetting of annual patient healthcare insurance plan deductibles , both of which may cause patients to delay or decline elective procedures such as functional endoscopic sinus surgery , or fess . in the second quarter , demand may be impacted by the seasonal nature of allergies , the resultant onset of sinus-related symptoms and the growth of high deductible insurance plans which may cause patients to delay or decline elective surgery until their deductible is met later in the year . in the third quarter , the number of fess procedures nationwide is historically lower than other quarters throughout the year , which we believe is attributable to the summer vacations of ent physicians and their patients . story_separator_special_tag selling , general and administrative expenses sg & a expenses increased $ 23.5 million , or 65 % , to $ 59.6 million during the year ended december 31 , 2015 , compared to $ 36.1 million during the year ended december 31 , 2014. the increase in sg & a expenses was primarily due to the build out of our infrastructure to support the ongoing commercialization of propel and propel mini . the primary component of this increase was employee-related expenses of our sales , marketing and reimbursement organizations which increased $ 16.9 million for the year ended december 31 , 2015 , compared to the year ended december 31 , 2014 , as we increased headcount to 129 as of december 31 , 2015 , compared to 97 as of december 31 , 2014. in addition , other sg & a expenses increased $ 6.6 million for the year ended december 31 , 2015 , compared to the year ended december 31 , 2014 , primarily due to an increase in headcount and expenses associated with being a public company . 53 research and development expenses r & d expenses increased $ 6.3 million , or 61 % , to $ 16.6 million during the year ended december 31 , 2015 , compared to $ 10.3 million during the year ended december 31 , 2014. the increase in r & d expenses was primarily due to an increase in personnel costs as we increased headcount and clinical trial costs . interest and other income ( expense ) , net interest and other income ( expense ) , net , increased $ 0.6 million to $ 0.3 million of income during the year ended december 31 , 2015 , compared to $ 0.3 million of expense during the year ended december 31 , 2014. the changes in interest and other expense , net , were primarily attributable to the fair value adjustments of the preferred stock warrants and interest income . the preferred stock warrants were converted to common stock warrants upon the completion of our ipo in july 2014 , and are no longer required to be marked-to-market at each reporting period . story_separator_special_tag text-indent:4 % ; font-size:10pt ; font-family : times new roman `` > management 's discussion and analysis of our financial condition and results of operations is based on our financial statements , which have been prepared in accordance with u.s. generally accepted accounting principles . the preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets , liabilities , revenue , expenses and related disclosures . our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances , the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions and any such differences may be material . while our significant accounting policies are more fully described in note 2 of our financial statements included in this annual report , we believe the following discussion addresses our most critical accounting policies , which are those that are most important to the portrayal of our financial condition and results of operations and require our most difficult , subjective and complex judgments . revenue recognition we derive revenue from the sale of propel and propel mini to hospitals and ambulatory surgery centers almost entirely in the united states . we recognize revenue when persuasive evidence of an arrangement exists , product delivery has occurred or there is no further obligation , pricing is fixed or determinable and collection is reasonably assured . we must make assumptions regarding the future collectability of amounts receivable from customers to determine whether revenue recognition criteria have been met . if collectability is not reasonably assured at the time of shipment , we defer revenue until such criteria have been met . in general , our standard terms and conditions of sale do not allow for product returns . we expense shipping and handling costs as incurred and include them in the cost of sales . in those cases where we bill shipping and handling costs to customers , we classify the amounts billed as a component of revenue . common stock valuation and stock-based compensation we maintain an equity incentive plan to provide long-term incentive for employees , consultants and members of the board of directors . the plan allows for the issuance of non-statutory and incentive stock options to employees and non-statutory stock options to consultants and non-employee directors . 56 we are required to determine the fair value of equity incentive awards and recognize compensation expense for all equity incentive awards made to employees , consultants and directors . stock-based compensation expense is recognized over the requisite service period in the statements of operations and comprehensive loss and is based on awards ultimately expected to vest , therefore the amount of expense has been reduced for estimated forfeitures . we use the straight-line method for expense attribution , except for awards issued with performance-based conditions which require an accelerated attribution method over the requisite performance and service periods . the valuation model we use for calculating the fair value of awards for stock-based compensation expense is the black-scholes option-pricing model , or the black-scholes model . the black-scholes model requires us to make assumptions and judgments about the variables used in the calculation , including the expected term weighted average period of time that the options granted are expected to be outstanding , the volatility of common stock and an assumed risk-free interest rate . following our ipo on july 23 , 2014 , the fair market value of our common stock is determined based on the closing price of our common stock on the nasdaq global market . prior to our ipo
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources overview as of december 31 , 2016 , we had cash , cash equivalents and short-term investments of $ 103.9 million and an accumulated deficit of $ 148.5 million , compared to cash , cash equivalents and short-term investments of $ 124.3 million and an accumulated deficit of $ 123.3 million as of december 31 , 2015. cash flows replace_table_token_6_th net cash used in operating activities during the year ended december 31 , 2016 , net cash used in operating activities was $ 20.1 million , consisting primarily of a net loss of $ 25.2 million and an increase in net operating assets of $ 3.6 million , partially offset by non-cash charges of $ 8.7 million . the cash used in operations was primarily due to the ongoing commercialization of propel and propel mini . to support the ongoing commercialization of these products , we continued to expand our sales , marketing and reimbursement organizations . the increase in net operating assets is primarily due to an increase in accounts receivable and inventory , partially offset by an increase in accounts payable . the non-cash charges primarily consisted of stock-based compensation expense . during the year ended december 31 , 2015 , net cash used in operating activities was $ 20.1 million , consisting primarily of a net loss of $ 26.6 million , partially offset by non-cash charges of $ 6.4 million and a decrease in net operating assets of $ 0.1 million . the cash used in operations was primarily due to the ongoing commercialization of propel and propel mini . to support the ongoing commercialization of these products , we continued to expand our sales , marketing and reimbursement organizations . the non-cash charges primarily consisted of stock-based compensation expense . the decrease in net operating assets is primarily due to an increase in accrued compensation , partially offset by an increase in accounts receivable and inventory .
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million or 49.0 % of net sales in 2010. new orders for 2011 were $ 3,072.5 million , an increase of $ 421.2 million or 15.9 % when compared with $ 2,651.3 million in 2010. as a result , the company 's backlog of unfilled orders at december 31 , 2011 was a year end record at $ 911.4 million . the company continued its emphasis on investment in research , development and engineering , spending $ 137.6 million in 2011 before customer reimbursement of $ 6.1 million . sales from products introduced in the last three years were $ 595.2 million or 19.9 % of net sales . in september 2011 , ametek completed a new five-year revolving credit facility with a total borrowing capacity of $ 700 million , which excludes an accordion feature that permits the company to request up to an additional $ 200 million in revolving credit commitments at any time during the life of the revolving credit agreement under certain conditions . the new revolving credit facility replaced a $ 450 million total borrowing capacity revolving credit facility , which excluded a $ 100 million accordion feature , that was due to expire in june 2012. at december 31 , 2011 , the company had $ 742.7 million available under its revolving credit facility , including the $ 200 million accordion feature . in the fourth quarter of 2011 , the company issued a 55 million swiss franc ( $ 59.0 million ) 2.44 % senior note due december 2021. results of operations the following table sets forth net sales and income by reportable segment and on a consolidated basis : replace_table_token_10_th ( 1 ) after elimination of intra- and intersegment sales , which are not significant in amount . ( 2 ) segment operating income represents net sales less all direct costs and expenses ( including certain administrative and other expenses ) applicable to each segment , but does not include interest expense . 23 year ended december 31 , 2011 compared with year ended december 31 , 2010 results of operations in 2011 , the company established records for sales , operating income , operating income margins , net income , diluted earnings per share and operating cash flow . the company achieved these results from strong internal growth in both eig and emg , as well as contributions from acquisitions completed in 2011 and the acquisitions of technical services for electronics ( tse ) in june 2010 , haydon enterprises in july 2010 and atlas material testing technology llc ( atlas ) in november 2010. the full year impact of the 2011 acquisitions and our operational excellence capabilities should have a positive impact on our 2012 results . net sales for 2011 were $ 2,989.9 million , an increase of $ 518.9 million or 21.0 % when compared with net sales of $ 2,471.0 million in 2010. net sales for eig were $ 1,647.2 million in 2011 , an increase of 24.4 % from net sales of $ 1,324.1 million in 2010. net sales for emg were $ 1,342.7 million in 2011 , an increase of 17.1 % from net sales of $ 1,146.8 million in 2010. the increase in net sales was primarily attributable to higher order rates , as well as the impact of the acquisitions mentioned above . the net sales increase for 2011 was driven by strong internal sales growth of approximately 11 % , which excludes a 1 % favorable effect of foreign currency translation . the acquisitions mentioned above contributed the remainder of the net sales increase . total international sales for 2011 were $ 1,501.1 million or 50.2 % of net sales , an increase of $ 289.8 million or 23.9 % when compared with international sales of $ 1,211.3 million or 49.0 % of net sales in 2010. the $ 289.8 million increase in international sales resulted from higher sales growth noted above , driven by continued strong expansion into asia , as well as growth in europe , and includes the effect of foreign currency translation . both reportable segments of the company maintain a strong international sales presence in europe and asia . export shipments from the united states , which are included in total international sales , were $ 774.9 million in 2011 , an increase of $ 210.4 million or 37.3 % compared with $ 564.5 million in 2010. export shipments improved due to increased exports from both the base businesses and the acquisitions noted above . new orders for 2011 were $ 3,072.5 million , an increase of $ 421.2 million or 15.9 % when compared with $ 2,651.3 million in 2010. for 2011 , internal order growth was approximately 8 % , excluding a 1 % favorable effect of foreign currency translation , driven by the differentiated businesses of both eig and emg , with the acquisitions mentioned above accounting for the remainder of the increase . as a result , the company 's backlog of unfilled orders at december 31 , 2011 was a year end record at $ 911.4 million , an increase of $ 82.6 million or 10.0 % when compared with $ 828.8 million at december 31 , 2010. segment operating income for 2011 was $ 682.9 million , an increase of $ 156.3 million or 29.7 % when compared with segment operating income of $ 526.6 million in 2010. segment operating income , as a percentage of net sales , increased to 22.8 % in 2011 from 21.3 % in 2010. the increase in segment operating income and segment operating margins resulted primarily from the leveraged impact of the company 's net sales increase noted above , as well as the benefits of the company 's lower cost structure through operational excellence initiatives . story_separator_special_tag the company accounts for the sales incentive as a reduction of revenues when the sale is recognized . accruals for sales returns , other allowances and estimated warranty costs are provided at the time revenue is recognized based upon past experience . at december 31 , 2011 , 2010 and 2009 , the accrual for future warranty obligations was $ 22.5 million , $ 18.3 million and $ 16.0 million , respectively . the company 's expense for warranty obligations was $ 13.2 million , $ 10.6 million and $ 8.2 million in 2011 , 2010 and 2009 , respectively . the warranty periods for products sold vary widely among the company 's operations , but for the most part do not exceed one year . the company calculates its warranty expense provision based on past warranty experience and adjustments are made periodically to reflect actual warranty expenses . if actual future sales returns and allowances and warranty amounts are higher than past experience , additional accruals may be required . accounts receivable . the company maintains allowances for estimated losses resulting from the inability of specific customers to meet their financial obligations to the company . a specific reserve for bad debts is recorded against the amount due from these customers . for all other customers , the company recognizes reserves for bad debts based on the length of time specific receivables are past due based on its historical experience . if the financial condition of the company 's customers were to deteriorate , resulting in their inability to make payments , additional allowances may be required . the allowance for possible losses on receivables was $ 7.8 million and $ 6.0 million at december 31 , 2011 and 2010 , respectively . inventories . the company uses the first-in , first-out ( fifo ) method of accounting , which approximates current replacement cost , for approximately 74 % of its inventories at december 31 , 2011. the last-in , first-out ( lifo ) method of accounting is used to determine cost for the remaining 26 % of its inventory at december 31 , 2011. for inventories where cost is determined by the lifo method , the fifo value would have been $ 25.1 million and $ 23.9 million higher than the lifo value reported in the consolidated balance sheet at december 31 , 2011 and 2010 , respectively . the company provides estimated inventory reserves for slow-moving and obsolete inventory based on current assessments about future demand , market conditions , customers who may be experiencing financial difficulties and related management initiatives . if these factors are less favorable than those projected by management , additional inventory reserves may be required . 30 goodwill and other intangible assets . goodwill and other intangible assets with indefinite lives , primarily trademarks and trade names , are not amortized ; rather , they are tested for impairment at least annually . the impairment test for goodwill requires a two-step process . the first step is to compare the carrying amount of the reporting unit 's net assets to the fair value of the reporting unit . if the fair value exceeds the carrying value , no further evaluation is required and no impairment loss is recognized . if the carrying amount exceeds the fair value , then the second step must be completed , which involves allocating the fair value of the reporting unit to each asset and liability , with the excess being implied goodwill . an impairment loss occurs if the amount of the recorded goodwill exceeds the implied goodwill . the company would be required to record any such impairment losses . the company identifies its reporting units at the component level , which is one level below our operating segments . generally , goodwill arises from acquisitions of specific operating companies and is assigned to the reporting unit in which a particular operating company resides . our reporting units are composed of the business units one level below our operating segment at which discrete financial information is prepared and regularly reviewed by segment management . the company principally relies on a discounted cash flow analysis to determine the fair value of each reporting unit , which considers forecasted cash flows discounted at an appropriate discount rate . the company believes that market participants would use a discounted cash flow analysis to determine the fair value of its reporting units in a sale transaction . the annual goodwill impairment test requires the company to make a number of assumptions and estimates concerning future levels of revenue growth , operating margins , depreciation , amortization and working capital requirements , which are based upon the company 's long-range plan . the company 's long-range plan is updated as part of its annual planning process and is reviewed and approved by management . the discount rate is an estimate of the overall after-tax rate of return required by a market participant whose weighted average cost of capital includes both equity and debt , including a risk premium . while the company uses the best available information to prepare its cash flow and discount rate assumptions , actual future cash flows or market conditions could differ significantly resulting in future impairment charges related to recorded goodwill balances . while there are always changes in assumptions to reflect changing business and market conditions , the company 's overall methodology and the population of assumptions used have remained unchanged . in order to evaluate the sensitivity of the goodwill impairment test to changes in the fair value calculations , the company applied a hypothetical 10 % decrease in fair values of each reporting unit . the results ( expressed as a percentage of carrying value for the respective reporting unit ) showed that , despite the hypothetical 10 % decrease in fair value , the fair values of the company 's reporting units still exceeded their respective carrying values by 66 %
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources cash provided by operating activities totaled $ 508.6 million in 2011 , an increase of $ 85.6 million or 20.2 % when compared with $ 423.0 million in 2010. the increase in cash provided by operating activities was primarily 27 due to the $ 100.6 million increase in net income , partially offset by higher overall operating working capital levels necessary to grow the company 's businesses . free cash flow ( cash flow provided by operating activities less capital expenditures ) was $ 457.8 million in 2011 , compared with $ 383.8 million in 2010. ebitda ( earnings before interest , income taxes , depreciation and amortization ) was $ 712.2 million in 2011 , compared with $ 545.9 million in 2010. free cash flow and ebitda are presented because the company is aware that they are measures used by third parties in evaluating the company . ( see the notes to selected financial data included in item 6 in this annual report on form 10-k for a reconciliation of u.s. generally accepted accounting principles ( gaap ) measures to comparable non-gaap measures ) . cash used for investing activities totaled $ 526.5 million in 2011 , compared with $ 566.8 million in 2010. in 2011 , the company paid $ 474.9 million for five business acquisitions , net of cash received , compared with $ 538.6 million paid for six business acquisitions , net of cash received , in 2010. additions to property , plant and equipment totaled $ 50.8 million in 2011 , compared with $ 39.2 million in 2010. cash provided by financing activities totaled $ 31.9 million in 2011 , compared with $ 62.6 million in 2010. in 2011 , net total borrowings increased by $ 99.1 million , compared with a net total borrowings increase of $ 139.3 million in 2010. in 2011 , the company repurchased 1.7 million shares of its common stock for $ 59.3 million , compared with $ 78.6 million used for repurchases of 3.1 million shares of the company 's common stock in 2010. in november 2011 , the board of directors approved an increase of $ 100 million in the authorization for the repurchase of the
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customers for optical communications products include network equipment manufacturers such as alcatel-lucent , ciena , cisco systems , ericsson , fujitsu , hewlett-packard , huawei , ibm , nokia siemens networks , and tellabs . customers for jdsu commercial lasers include amada , asml , beckman coulter , becton dickinson , disco , electro scientific industries , and han 's laser . customers for photovoltaic products include amplifier research , ets-lindgren , nanjing xinning optoelectronics automation and siemens . advanced optical technologies the aot business segment leverages its core technology strengths in optics and materials science to manage light and or color effects for a wide variety of marketsfrom product security to space exploration . aot consists of the authentication solutions group , the custom optics products group , and the flex products group . the authentication solutions group provides multilayer authentication solutions that include overt , covert , forensic , and digital technologies for protection from product and document counterfeiting and tampering . these solutions , many of which leverage aot color-shifting and holographic technologies , safeguard brands in the secure document , transaction card , pharmaceutical , consumer electronics , printing/imaging supplies , licensing , and fast-moving consumer goods industries . the custom optics group produces precise , high-performance , optical thin-film coatings for a variety of applications in government and aerospace , biomedical , display , office automation , entertainment , and other emerging markets . these applications include night-vision goggles , satellite solar covers , medical instrumentation , information displays , office equipment , computer-driven projectors , 3d cinema and gesture recognition . the flex products group includes custom color solutions , a product line of unique solutions for product finishes and a wide variety of decorative packaging . these include innovative , optically-based , light-management solutions that provide product enhancement for brands in the pharmaceutical , automotive , consumer electronics , and fast-moving consumer goods industries . the group 's high-end printing services produce labels for a wide variety of commercial and industrial products , and its color-shifting pigments protect the currencies of more than 90 countries including china , the european union , and the united states . 35 the aot business segment serves customers such as 3m , dolby , kingston , lockheed martin , northrup grumman , pan pacific , and sicpa . leading issuers of transaction cards such as mastercard and american express . also , pharmaceutical companies worldwide use aot business segment solutions to protect their brands . overview net revenue in fiscal 2011 increased 32.3 % , or $ 440.6 million , to $ 1,804.5 million from $ 1,363.9 million in fiscal 2010. net revenue in fiscal 2011 consisted of $ 803.0 million , or approximately 44.5 % of net revenue , from commtest , $ 770.8 million , or approximately 42.7 % of net revenue , from ccop , and $ 230.7 million , or approximately 12.8 % of net revenue , from aot . commtest net revenue excludes $ 11.7 million related to fair value adjustments of acquired deferred revenue . gross margin in fiscal 2011 increased 3.7 percentage points to 43.8 % from 40.1 % in fiscal 2010. the increase in gross margin was primarily related to lower infrastructure costs , benefits from economies of scale resulting from increased sales volumes , favorable product mix in commtest and ccop , and the introduction of new products in commtest and ccop in the last two years , as well as products acquired through the nsd acquisition . r & d expense in fiscal 2011 increased 37.2 % , or $ 65.0 million , to $ 239.9 million from $ 174.9 million in fiscal 2010. the increase is primarily due to additional investment associated with the nsd acquisition and an increased investment in organic r & d projects . as a percentage of revenue , r & d expense slightly increased to 13.3 % from 12.8 % in fiscal 2010. sg & a expense in fiscal 2011 increased 14.2 % , or $ 54.2 million , to $ 437.1 million from $ 382.9 million in fiscal 2010. the increase is primarily a result of higher selling costs due to increased revenue and an increased investment in information technology , together with increases associated with the nsd acquisition . as a percentage of revenue , sg & a expenses decreased to 24.2 % from 28.1 % in fiscal 2010. recently issued accounting pronouncements in june 2011 , the financial accounting standards board ( `` fasb `` ) issued amended guidance on the presentation of comprehensive income . the amended guidance eliminates one of the presentation options provided by current u.s. gaap that is to present the components of other comprehensive income as part of the statement of changes in stockholders ' equity . in addition , it gives an entity the option to present the total of comprehensive income , the components of net income , and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements . this guidance is effective for us in the third quarter of fiscal 2012 , and will be applied retrospectively . we are currently evaluating the disclosure impact of the adoption of this guidance on our consolidated financial statements . in may 2011 , the fasb issued amended guidance on fair value measurement and related disclosures . the new guidance clarified the concepts applicable for fair value measurement and requires new disclosures , with a particular focus on level 3 measurements . this guidance is effective for us in the third quarter of fiscal 2012 , and will be applied prospectively . we do not anticipate a material impact on our consolidated financial statements as a result of the adoption of this amended guidance . story_separator_special_tag circumstances which could trigger a review include , but are not limited to : significant decreases in the market price of the asset ; significant adverse changes in the business climate or legal factors ; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset ; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset ; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life . recoverability is assessed based on the carrying amounts of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset , as well as specific appraisals in certain instances . an impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value . income taxes in accordance with the authoritative guidance on accounting for income taxes , we recognize income taxes using an asset and liability approach . this approach requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns . the measurement of current and deferred taxes is based on provisions of the enacted tax law and the effects of future changes in tax laws or rates are not anticipated . the authoritative guidance provides for recognition of deferred tax assets if the realization of such deferred tax assets is more likely than not to occur . with the exception of certain international jurisdictions , we have determined that at this time it is more likely than not that deferred tax assets 41 attributable to the remaining jurisdictions will not be realized , primarily due to uncertainties related to our ability to utilize our net operating loss carryforwards before they expire . accordingly , we have established a valuation allowance for such deferred tax assets . if there is a change in our ability to realize our deferred tax assets , then our tax provision may decrease in the period in which we determine that realization is more likely than not . the authoritative guidance on accounting for uncertainty in income taxes clarifies the accounting for uncertainty in income taxes recognized in an entity 's financial statements and prescribes the recognition threshold and measurement attributes for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return . additionally , it provides guidance on recognition , classification , and disclosure of tax positions . we are subject to income tax audits by the respective tax authorities in all of the jurisdictions in which we operate . the determination of tax liabilities in each of these jurisdictions requires the interpretation and application of complex and sometimes uncertain tax laws and regulations . we recognize liabilities based on our estimate of whether , and the extent to which , additional tax liabilities are more likely than not . if we ultimately determine that the payment of such a liability is not necessary , then we reverse the liability and recognize a tax benefit during the period in which the determination is made that the liability is no longer necessary . the recognition and measurement of current taxes payable or refundable and deferred tax assets and liabilities requires that we make certain estimates and judgments . changes to these estimates or a change in judgment may have a material impact on our tax provision in a future period . restructuring accrual in accordance with authoritative guidance on accounting for costs associated with exit or disposal activities , generally costs associated with restructuring activities are recognized when they are incurred . however , in the case of leases , the expense is estimated and accrued when the property is vacated . given the significance of , and the timing of the execution of such activities , this process is complex and involves periodic reassessments of estimates made at the time the original decisions were made , including evaluating real estate market conditions for expected vacancy periods and sub-lease rents . a liability for post-employment benefits for workforce reductions related to restructuring activities is recorded when payment is probable , the amount is reasonably estimable , and the obligation relates to rights that have vested or accumulated . we continually evaluate the adequacy of the remaining liabilities under our restructuring initiatives . although we believe that these estimates accurately reflect the costs of our restructuring plans , actual results may differ , thereby requiring us to record additional provisions or reverse a portion of such provisions . pension and other postretirement benefits the funded status of our retirement-related benefit plans is recognized in the consolidated balance sheets . the funded status is measured as the difference between the fair value of plan assets and the benefit obligation at fiscal year end , the measurement date . for defined benefit pension plans , the benefit obligation is the projected benefit obligation ( `` pbo `` ) and for the nonpension postretirement benefit plan the benefit obligation is the accumulated postretirement benefit obligation ( `` apbo `` ) . the pbo represents the actuarial present value of benefits expected to be paid upon retirement . the apbo represents the actuarial present value of postretirement benefits attributed to employee services already rendered . the fair value of plan assets represents the current market value of cumulative company contributions made to an irrevocable trust fund , held for the sole benefit of participants . unfunded or partially funded plans , with the benefit obligation exceeding the fair value of plan assets , are aggregated and recorded as a retirement and
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources our cash investments are made in accordance with an investment policy approved by the audit committee of our board of directors . in general , our investment policy requires that securities purchased be rated a-1/p-1 , a/a2 or better . securities that are downgraded subsequent to purchase are evaluated and may be sold or held at management 's discretion . no security may have an effective maturity that exceeds 37 months , and the average duration of our holdings may not exceed 18 months . at any time , no more than 5 % of the investment portfolio may be concentrated in a single issuer other than the u.s. government or u.s. agencies . our investments in debt securities and marketable equity securities are primarily classified as available-for-sale investments or trading securities and are recorded at fair value . the cost of securities sold is based on the specific identification method . unrealized gains and losses on available-for-sale investments are reported as a separate component of stockholders ' equity . we did not hold any investments in auction rate securities , mortgage backed securities , collateralized debt obligations , or variable rate demand notes at july 2 , 2011 and virtually all debt securities held were of investment grade ( at least bbb-/baa3 ) . as of july 2 , 2011 , approximately 85 % of our cash , cash equivalents , and short-term investments were held in the u.s. as of july 2 , 2011 , the majority of our cash investments have maturities of 90 days or less and are of high credit quality . during fiscal 2011 , we recognized $ 0.2 million of investment losses and can provide no assurances that the value or the liquidity of our other investments will not also be impacted by adverse conditions in the financial markets . in addition , we maintain cash balances in operating accounts that are with third party financial institutions . these balances in the u.s. may exceed the 58 federal deposit insurance corporation ( `` fdic '' ) insurance limits .
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the company recently completed construction of a new plant in ponta grossa , brazil with the first line commencing commercial operations in the first quarter of 2011 and a second line commencing commercial operations in the second quarter of 2011. in addition , the company commenced commercial operations of a second line in its plant in estancia , brazil in the second quarter of 2011. at full capacity and efficiency , these additions are expected to add annual capacity of more than 2.5 billion cans . the company also plans to construct a new beverage can plant in belem , brazil which is expected to be completed during the fourth quarter of 2012. net sales in the americas beverage segment increased from $ 2,097 in 2010 to $ 2,273 in 2011 primarily due to $ 113 from the pass-through of higher raw material costs , primarily aluminum , $ 48 from increased sales unit volumes due to market growth in brazil which offset lower sales unit volumes in the u.s. and $ 15 from the impact of foreign currency translation . the increase in sales unit volumes is primarily due to the start of commercial operations at the company 's plant in ponta grossa , brazil in the first quarter of 2011 and the start of commercial operations on the second can line at the company 's plant in estancia , brazil in the second quarter of 2011. net sales in the americas beverage segment increased from $ 1,819 in 2009 to $ 2,097 in 2010 , primarily due to $ 206 from increased sales unit volumes and $ 39 from the impact of foreign currency translation . segment income in the americas beverage segment increased from $ 275 in 2010 to $ 302 in 2011 primarily due to $ 19 from increased sales unit volumes and favorable product mix and $ 7 from lower operating costs . segment income in the americas beverage segment increased from $ 207 in 2009 to $ 275 in 2010 , primarily due to increased sales unit volumes in the u.s. , canada and brazil . north america food the north america food segment manufactures steel and aluminum food cans and ends and metal vacuum closures and supplies a variety of customers in the u.s. and canada . net sales in the north america food segment decreased from $ 897 in 2010 to $ 889 in 2011 primarily due to $ 54 from lower sales unit volumes as decreased market demand in the u.s. for food cans offset higher sales unit volumes in metal vacuum closures . the decrease was partially offset by $ 39 from the pass-through of higher raw material costs , primarily tinplate , and $ 7 from the impact of foreign currency translation . net sales in the north america food segment decreased from $ 1,006 in 2009 to $ 897 in 2010 primarily due to the pass-through of lower steel costs and a $ 76 from lower sales unit volumes , partially offset by $ 11 from the impact of foreign currency translation . -32- crown holdings , inc. segment income in the north america food segment increased from $ 120 in 2010 to $ 146 in 2011 primarily due to $ 19 from lower operating costs including the benefits from prior plant closures in canada and lower postretirement benefits in the u.s. resulting from plan amendments in 2010 and 2011 and $ 5 from inventory holding gains from the sale of inventory on hand at the end of 2010. segment income in the north america food segment decreased from $ 140 in 2009 to $ 120 in 2010 , primarily due to inventory holding gains from 2009 that did not recur in 2010. europe beverage the company 's european beverage segment manufactures steel and aluminum beverage cans and ends and supplies a variety of customers throughout eastern and western europe , the middle east and north africa . in the second quarter of 2011 , the company commenced commercial operations of the second line at its plant in kechnec , slovakia . the second line is expected to add full annualized capacity of 750 million cans . in the third quarter of 2012 , the company expects to complete construction of a new plant in osmaniye , turkey which is expected to add full annualized capacity of 700 million cans . net sales in the european beverage segment increased from $ 1,524 in 2010 to $ 1,669 in 2011 primarily due to $ 58 from increased sales unit volumes primarily in slovakia , $ 56 from the pass-through of higher raw material costs and $ 31 from the impact of foreign currency translation . net sales in the european beverage segment decreased from $ 1,567 in 2009 to $ 1,524 in 2010 primarily due to the pass-through of lower raw material costs and $ 29 from the impact of foreign currency translation , partially offset by $ 101 from increased sales unit volumes . segment income in the european beverage segment decreased from $ 244 in 2010 to $ 210 in 2011 primarily due to increased costs , including lower productivity , which were not fully offset by increases in selling prices and increased volume activity . segment income in the european beverage segment decreased from $ 262 in 2009 to $ 244 in 2010 primarily due to pricing adjustments including inventory holding gains from 2009 that did not recur in 2010 and $ 4 from the impact of foreign currency translation , partially offset by an increase in sales unit volumes . european food the european food segment manufactures steel and aluminum food cans and ends , and metal vacuum closures and supplies a variety of customers throughout europe and africa . story_separator_special_tag the company 's total net leverage ratio of 2.78 to 1.0 at december 31 , 2011 was in compliance with the covenant requiring a ratio no greater than 4.0 to 1.0. the ratios are calculated at the end of each quarter using debt and cash balances as of the end of the quarter and adjusted ebitda and interest expense for the most recent twelve months . failure to meet the financial covenants could result in the acceleration of any outstanding amounts due under the revolving credit facilities , term loan agreements and senior notes due 2017 , 2018 and 2021. in addition , the interest rate on the revolving credit facilities can vary from euribor or libor plus a margin of 1.75 % up to 2.25 % based on the total net leverage ratio . the margin is 1.75 % at a ratio of less than 2.0 to 1.0 , 2.25 % at a ratio of 2.5 to 1.0 or higher , and 2.0 % in between . the term loans bear interest of libor or euribor plus 1.75 % . the company 's current sources of liquidity and borrowings expire or mature as follows : its $ 200 north american securitization facility in march 2013 ; its $ 1,200 revolving credit facilities in june 2015 ; its $ 400 7.625 % senior notes in may 2017 ; its 500 ( $ 647 ) 7.125 % senior notes in august 2018 ; its $ 700 6.25 % senior notes in february 2021 ; its $ 350 7.375 % senior notes in december 2026 ; its $ 64 7.5 % senior notes in december 2096 ; and $ 230 of other indebtedness in various currencies at various dates through 2019. in addition the company 's term loan facilities mature as follows : $ 45 in june 2013 , $ 91 in june 2014 , $ 136 in june 2015 and $ 633 in june 2016. debt activity in january 2011 , the company sold $ 700 principal amount of 6.25 % senior notes due 2021. the company used a portion of the proceeds to retire all of its $ 600 outstanding 7.75 % senior notes due 2015 . -39- crown holdings , inc. in june 2011 , the company amended its existing senior secured credit facilities to add a $ 200 term loan facility and a 274 ( $ 355 at december 31 , 2011 ) term loan facility , each of which will mature in june 2016 and bear interest at libor or euribor plus 1.75 % . the company used borrowings under the new term loan facilities to repay its existing term loans , which were scheduled to mature on november 15 , 2012 , and to redeem all of the company 's outstanding 6.25 % first priority senior secured notes due 2011. in november 2011 , the company amended its existing senior secured credit facilities to add an additional $ 350 term loan facility which expires in june 2016 and bears interest at libor plus 1.75 % . the company used borrowings under the new term loan to pre-fund its pension obligations in the u.s. and canada . see note q to the consolidated financial statements for further information relating to the company 's debt . contractual obligations contractual obligations as of december 31 , 2011 are summarized in the table below . replace_table_token_5_th all amounts due in foreign currencies are translated at exchange rates as of december 31 , 2011. interest on long-term debt is presented through 2017 only , represents the interest that will accrue by year , and is calculated based on interest rates in effect as of december 31 , 2011. interest on the company 's revolving credit facility is calculated based on $ 119 of outstanding balances as of december 31 , 2011. the projected pension contributions caption includes the contributions the company expects to make in 2012 to 2016 to fund its plans . the postretirement obligations caption includes the expected payments through 2021 to retirees for medical and life insurance coverage . the pension and postretirement projections require the use of numerous estimates and assumptions such as discount rates , rates of return on plan assets , compensation increases , health care cost increases , mortality and employee turnover . therefore , these amounts have been provided for five years only in the case of pensions and through 2021 in the case of postretirement costs . purchase obligations include commitments for raw materials and utilities at december 31 , 2011. these commitments specify significant terms , including fixed or minimum quantities to be purchased ; fixed , minimum or variable pricing provisions ; and the approximate timing of transactions . the obligations above exclude $ 37 of unrecognized tax benefits for which the company has recorded liabilities . these amounts have been excluded because the company is unable to estimate when these amounts may be paid , if at all . see note w to the consolidated financial statements for additional information on the company 's unrecognized tax benefits . in order to further reduce leverage and future cash interest payments , the company may from time to time repurchase outstanding notes and debentures with cash , exchange shares of its common stock for the company 's outstanding notes and debentures , or seek to refinance its existing credit facilities and other indebtedness . the company will evaluate any such transactions in light of then existing market conditions and may determine not to pursue such transactions . -40- crown holdings , inc. market risk in the normal course of business the company is subject to risk from adverse fluctuations in foreign exchange and interest rates and commodity prices . the company manages these risks through a program that includes the use of derivative financial instruments , primarily swaps and forwards . counterparties to these contracts are major financial institutions . these instruments are not used for trading or speculative purposes .
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | loss from early extinguishments of debt during 2011 , the company recorded a charge of $ 32 in connection with the repayment of its $ 600 outstanding 7.75 % senior secured notes due 2015 and its 83 ( $ 121 ) 6.25 % first priority senior secured notes due 2011. during 2010 , the company recorded a charge of $ 16 in connection with the repayment of 76 ( $ 101 ) of its 6.25 % first priority senior secured notes due 2011 and its $ 200 outstanding 7.625 % senior notes due 2013. during 2009 , the company recorded a charge of $ 26 in connection with the repayment of 300 ( $ 442 ) of its 6.25 % first priority senior secured notes due 2011 , its outstanding 8.0 % debentures due 2023 , $ 300 of its 7.625 % senior notes due 2013 and $ 86 of its 7.50 % debentures due 2096. interest expense interest expense increased from $ 203 in 2010 to $ 232 in 2011 primarily due to $ 23 from higher average debt outstanding and $ 4 from the impact of foreign currency translation . interest expense decreased from $ 247 in 2009 to $ 203 in 2010 primarily due to $ 41 from lower average debt outstanding . translation and foreign exchange adjustments during 2011 , 2010 and 2009 , the company recorded foreign exchange ( losses ) /gains of $ ( 2 ) , $ 4 and $ 6 , respectively , primarily for certain subsidiaries that had unhedged currency exposure arising from intercompany debt obligations and for other subsidiaries whose functional currency is not their local currency .
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potential liability for remedial actions and increased costs under existing or future environmental regulations , including those relating to climate change ; 35 potential liability resulting from pending or future litigation , or from changes in the laws , regulations or policies of governments or other governmental activities in the countries in which we operate ; changes in currency exchange rates and interest rates ; our level of indebtedness , which could diminish our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy or the chemicals industry ; and various other factors , both referenced and not referenced in this annual report . many of these factors are macroeconomic in nature and are , therefore , beyond our control . should one or more of these risks or uncertainties materialize , or should underlying assumptions prove incorrect , our actual results , performance or achievements may vary materially from those described in this annual report as anticipated , believed , estimated , expected , intended , planned or projected . we neither intend nor assume any obligation to update these forward-looking statements , which speak only as of their dates . overview we are a global technology and specialty materials company . we are one of the world 's largest producers of acetyl products , which are intermediate chemicals , for nearly all major industries , as well as a leading global producer of high performance engineered polymers that are used in a variety of high-value applications . as a recognized innovator in the chemicals industry , we engineer and manufacture a wide variety of products essential to everyday living . our broad product portfolio serves a diverse set of end-use applications including paints and coatings , textiles , automotive applications , consumer and medical applications , performance industrial applications , filter media , paper and packaging , chemical additives , construction , consumer and industrial adhesives , and food and beverage applications . our products enjoy leading global positions due to our large global production capacity , operating efficiencies , proprietary production technology and competitive cost structures . our large and diverse global customer base primarily consists of major companies in a broad array of industries . we hold geographically balanced global positions and participate in diversified end-use applications . we combine a demonstrated track record of execution , strong performance built on shared principles and objectives , and a clear focus on growth and value creation . known for operational excellence and execution of our business strategies , we deliver value to customers around the globe with best-in-class technologies and solutions . 2011 highlights : we opened a state-of-the art polyacetal ( “ pom ” ) production facility in frankfurt hoechst industrial park , germany . with a nameplate capacity of 140,000 tons per year , the new pom plant is the world 's largest and strengthens our ticona engineering polymers business , including its global operations and advanced technical capabilities . we published independent third-party analyses of celanese tcx ® , our proprietary technology for ethanol production . under non-disclosure agreements to protect intellectual property rights and maintain confidentiality , fluor corporation and worleyparsons evaluated our advanced ethanol technology that uses basic hydrocarbon feedstocks . we doubled the capacity of our vinyl acetate ethylene ( “ vae ” ) unit in nanjing , china . the expanded unit started production in the second quarter of 2011 and is expected to meet the increased global demand for innovative specialty solutions in vinyl-based emulsions . we nearly doubled production capacity at our celstran ® long-fiber reinforced thermoplastic ( “ lft ” ) manufacturing unit in nanjing , china during the fourth quarter of 2011. the unit came online in 2008 with an initial nameplate capacity of 5,000 tons per year . we successfully completed a public offering of $ 400 million in aggregate principal amount of senior unsecured notes at 5.875 % due 2021 . we used the net proceeds from the offering , plus cash on hand , to retire $ 516 million of existing senior secured credit facility indebtedness that was set to mature in 2014 . polyplastics co. , ltd. ( “ polyplastics ” ) , one of the company 's strategic equity affiliates , announced a 90,000 ton per year expansion to increase polyacetal production capacity in malaysia that is expected to be operational in early 2014. the expansion is currently anticipated to be funded by polyplastics . 36 we announced plans for one , and possibly two , industrial ethanol production facilities in china . in addition , we plan to accelerate our entry into the industrial ethanol business six to 12 months earlier than previously expected , by modifying and enhancing our existing integrated acetyl facility at the nanjing chemical industrial park with our tcx ® advanced technology , adding approximately 200,000 tons of ethanol production capacity by mid-2013 . we broke ground on the previously announced plans for a technology development unit for ethanol production at our facility in clear lake , texas , which is now expected to be commissioned by mid-2012 . we also intend to construct a new research and development facility at our clear lake site to continue the advancement of our acetyl and tcx ® technologies . we announced the expansion of our ethylene vinyl acetate ( “ eva ” ) capacity at our edmonton manufacturing facility due to strong growth in strategic , high-value segments . global eva production increases are fueled by demand in the photovoltaic cell industry in china , strong demand for eva in other parts of asia , and demand for eva in innovative applications like controlled-release excipients and medical packaging . story_separator_special_tag operating profit decreased by $ 110 million for the year ended december 31 , 2011 as compared to the same period in 2010 mainly due to an increase in other charges related to the relocation of our pom production facility to frankfurt hoechst industrial park . in addition , aem experienced higher depreciation related to this new pom plant , higher raw material costs and additional spending on innovation , distribution , energy costs and inflation . other charges were higher than in the prior year reflecting the absence of a decrease in legal fees and recoveries associated with plumbing actions in 2010 as well as the higher costs incurred in 2011 associated with the relocation and expansion of our ticona kelsterbach , germany pom production operations . these higher costs were partially offset by our expanded gross margins and higher volumes . for the year ended december 31 , 2011 , an increase in equity in net earnings ( loss ) of affiliates partially offset the decrease in earnings ( loss ) from continuing operations before tax . the increase in net earnings ( loss ) of affiliates was primarily driven by higher earnings in our ibn sina affiliate , which provides an economic hedge against raw material costs used in our ticona operations and is constructing a 50,000 ton pom production facility . operating and financial results of our polyplastics strategic affiliate were modestly impacted by the march 2011 natural disasters in japan and a plant turnaround during the year ended december 31 , 2011 . 44 consumer specialties replace_table_token_17_th our consumer specialties segment consists of our acetate products and nutrinova businesses . our acetate products business produces and supplies cellulose acetate flake , film and tow , primarily used in filter products applications . our nutrinova business produces and sells sunett ® , a high intensity sweetener , and food protection ingredients , such as sorbates and sorbic acid , for the food , beverage and pharmaceuticals industries . net sales for consumer specialties increased $ 63 million for the year ended december 31 , 2011 as compared to the same period in 2010 . acetate products pricing increased while volumes stayed relatively flat year over year . nutrinova 's volumes increased slightly reflecting higher demand and new applications for sunett ® , offsetting its decrease in pricing . sorbates product price increases more than offset its slight decrease in volumes . operating profit increased $ 63 million for the year ended december 31 , 2011 as compared with the same period in 2010 primarily due to the absence of the long-lived asset impairment losses of $ 72 million incurred in 2010 associated with management 's assessment of the closure of our acetate flake and tow production operations in spondon , derby , united kingdom . higher raw material and energy costs and increased spending on planned maintenance and reliability efforts were offset by higher acetate pricing . during the year ended december 31 , 2011 , the company incurred an additional $ 4 million in other charges relating to severance associated with the spondon shut down . in 2010 , other charges included the $ 72 million for asset impairment losses . 45 industrial specialties replace_table_token_18_th our industrial specialties segment includes our emulsions and eva performance polymers businesses . the emulsions business is a leading global producer of vinyl acetate based emulsions and develops products and application technology to improve performance , create value and drive innovation in applications such as paints and coatings , adhesives , construction , glass fiber , textiles and paper . celanese emulsions products are sold under globally and regionally recognized brands including ecovae ® , mowilith ® , vinamul ® , celvolit ® , britecoat tm , tufcor tm , and avicor tm . eva performance polymers , the specialty polymers business of celanese , is a leading north american manufacturer of a full range of low-density polyethylene and specialty eva resins and compounds . sold under the ateva ® and vitaldose tm trade names , these products are used in many applications , including flexible packaging films , lamination film products , hot melt adhesives , medical products , automotive , carpeting and photovoltaic cells . net sales increased in our industrial specialties segment by $ 187 million for the year ended december 31 , 2011 compared to the same period in 2010 . increased net sales were a result of geographic growth , and higher volumes of innovative applications from our emulsions business , favorable currency impact and higher pricing in both our emulsions and our eva performance polymers businesses . operating profit increased by $ 11 million for the year ended december 31 , 2011 compared to the same period in 2010 . the increase in operating profit is attributed to higher volumes and increased pricing offset by higher raw material costs , increased spending on plant maintenance , additional spending on innovation , higher depreciation with the completion of our china facility expansion , as well as the impact of an insurance recovery in 2010 related to events of force majeure at our eva performance polymers facility in edmonton , alberta , canada in 2008 and 2009 . 46 acetyl intermediates replace_table_token_19_th our acetyl intermediates segment produces and supplies acetyl products , including acetic acid , vinyl acetate monomer ( “ vam ” ) , acetic anhydride and acetate esters . these products are generally used as raw materials for colorants , paints , adhesives , coatings , textiles and medicines . this business segment also produces organic solvents and intermediates for pharmaceutical , agricultural and chemical products . net sales increased by $ 469 million for the year ended december 31 , 2011 compared to the same period in 2010 due to higher pricing and favorable foreign currency impacts offset partially by lower volumes . volumes decreased primarily due to planned and unplanned outages at our nanjing facility and industry destocking at the end of
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | net cash used in financing activities net cash used in financing activities decreased $ 135 million for the year ended december 31 , 2011 from a cash outflow of $ 388 million in 2010 to a cash outflow of $ 253 million in 2011 . the decrease in cash used in financing activities is primarily related to lower net borrowings and fewer stock repurchase transactions when compared to the same period in 2010. on may 6 , 2011 , we completed an offering of $ 400 million of 5.875 % senior unsecured notes due 2021 ( the “ 5.875 % notes ” ) . we used the proceeds from the issuance of the 5.875 % notes and cash on hand to prepay the outstanding balance of $ 516 million on our term b loan facility . net cash used in financing activities increased from a cash outflow of $ 112 million in 2009 to a cash outflow of $ 388 million for the same period in 2010. the $ 276 million increase primarily relates to the net pay down on long-term debt of $ 297 million and $ 48 million used to repurchase shares of the company 's series a common stock . in addition , exchange rate effects on cash and cash equivalents was an unfavorable currency impact of $ 2 million in 2011 compared to a unfavorable impact of $ 18 million in 2010 and a favorable impact of $ 63 million in 2009. debt and other obligations senior notes in september 2010 , celanese us completed an offering of $ 600 million aggregate principal amount of 6.625 % senior unsecured notes due 2018 in a private placement conducted pursuant to rule 144a under the securities act of 1933 , as amended ( the “ securities act ” ) .
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although customer traffic and sales initially slowed following the imposition of social distancing and government-mandated economic shutdowns in march 2020 , resulting in higher rates of cancellation than usual as a result of buyers ' economic uncertainty , we saw a recovery in all of our metrics , including net sales orders , average sales pace per community , home closings , and cancellation rate throughout the remainder of the year . however , the duration and magnitude of the impact of the covid-19 pandemic remains unknown , and could adversely affect our business in future periods . because residential construction was designated as an essential business in nearly all of our operating markets , our construction operations continued wherever appropriate during the year , despite the shelter-in-place orders and other restrictions on commercial activity . all company operations have been conducted in compliance with federal , state , and local covid-19 guidelines , orders , and ordinances applicable to construction and homebuilding activities . since the height of the pandemic , the majority of the states in which we operate have begun to gradually resume normal business operations , and we have continued our construction operations in each of those states . from the beginning of the pandemic , we have taken and continue to take a number of strategic actions in response to the covid-19 crisis to continue to provide uninterrupted service 34 table of contents to our customers while protecting their health and safety , as well as that of our employees and vendors . specifically , we have focused on transforming our customer experience online through innovative digital options , including ( i ) shifting to a remote selling environment ; ( ii ) providing virtual options for online home tours , design center selections and new home demonstrations ; and ( iii ) offering “ curbside ” or “ drive thru ” closings nationwide . to mitigate the inherent business impacts and the uncertainty of the duration of the covid-19 pandemic , we implemented initiatives across the company to reduce all non-essential expenses and capital expenditures , including but not limited to temporarily reducing or deferring new land acquisitions , phasing development , and implementing a revised cadence on all new inventory home starts . these actions may reduce growth and cause a decline of our lot count and the volume of homes delivered in future periods . although we intentionally reduced our forecasted land spend for the year ended december 31 , 2020 , we continue to allocate capital and manage our land portfolio to acquire assets that have attractive characteristics , including good access to schools , shopping , recreation and transportation facilities . in connection with our overall land inventory management and investment process , our management team reviews these considerations , as well as other financial metrics , in order to decide the highest and best use of our capital . we intend to maintain a consistent approach to land positioning within our regions , markets and communities in the foreseeable future in an effort to concentrate a greater amount of our land inventory in attractive areas . we also intend to continue to combine our land development expertise with our homebuilding operations to increase the flexibility of our business and to optimize our margin performance . from time to time , we may sell land in our communities if we believe it is best for our overall strategy and operations . we do not expect such sales to have a significant effect on our overall results , but they may impact our overall gross margins . factors affecting comparability of results for the year ended december 31 , 2020 , we recognized $ 127.2 million of costs relating to our acquisition of wlh . for the year ended december 31 , 2019 , we recognized aggregate costs of $ 10.7 million relating to our acquisitions of wlh and av homes . for the year ended december 31 , 2018 , we recognized $ 30.8 million of costs relating to the av homes acquisition . such costs are recognized in transaction and corporate reorganization expenses on the consolidated statement of operations . for the year ended december 31 , 2020 , we recognized $ 74.1 million of expense relating to purchase accounting for wlh . of that expense , $ 69.7 million is included in cost of home closings and $ 4.4 million is included in cost of land closings . no such expenses were recognized for the years ended december 31 , 2019 or december 31 , 2018. for the years ended december 31 , 2020 and 2019 , we recognized $ 10.2 million and $ 5.8 million of expense relating to losses on our extinguishment of debt , respectively . for the year ended december 31 , 2018 , we did not incur a loss on extinguishment of debt . as of december 31 , 2019 , our assets in chicago were held for sale and as a result we adjusted the fair value of the assets within this division to the lower of fair value ( less costs to sell ) or net book value . in addition , we wrote off other components of the operations in accordance with the guidance set forth in accounting standards codification ( “ asc ” ) topic 360 , property , plant , and equipment . for the year ended december 31 , 2019 , total impacts to the consolidated statement of operations include the following : cost of home closings impact of $ 0.7 million , cost of land closings impact of $ 9.9 million , sales , commissions and other marketing costs impact of $ 0.4 million , general and administrative expenses impact of $ 1.1 million and other expense , net impact of $ 1.2 million . story_separator_special_tag lot option contracts enable us to control significant lot positions with a minimal initial capital investment and substantially reduce the risks associated with land ownership and development . in accordance with asc topic 38 table of contents 810 , consolidation , we have concluded that when we enter into an option or purchase agreement to acquire land or lots and pay a non-refundable deposit , a vie may be created because we are deemed to have provided subordinated financial support that will absorb some or all of an entity 's expected losses if they occur . if we are the primary beneficiary of the vie , we will consolidate the vie in our consolidated financial statements and reflect such assets and liabilities as real estate not owned under option agreements within our inventory balance in the consolidated balance sheets . valuation of deferred tax assets we account for income taxes using the asset and liability method , which requires that deferred tax assets and liabilities be recognized based on future tax consequences of both temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which the temporary differences are expected to be recovered or settled . the effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes are enacted . in accordance with asc topic 740-10 , income taxes , we evaluate our deferred tax assets by tax jurisdiction , including the benefit from net operating loss ( “ nol ” ) carryforwards by tax jurisdiction , to determine if a valuation allowance is required . companies must assess , using significant judgments , whether a valuation allowance should be established based on the consideration of all available evidence using a “ more likely than not ” standard with significant weight being given to evidence that can be objectively verified . this assessment considers , among other matters , the nature , frequency and severity of current and cumulative losses , forecasts of future profitability , the length of statutory carryforward periods , experience with operating losses and experience of utilizing tax credit carryforwards and tax planning alternatives . 39 table of contents results of operations the following table sets forth our results of operations for the periods presented : replace_table_token_10_th 40 table of contents non-gaap measures in addition to the results reported in accordance with accounting principles generally accepted in the united states ( “ gaap ” ) , we have provided information in this annual report relating to : ( i ) adjusted income before income taxes and related margin , ( ii ) ebitda and adjusted ebitda , ( iii ) adjusted net income and adjusted earnings per share , ( iv ) net homebuilding debt to capitalization ratio , and ( v ) adjusted home closings gross margin . adjusted income before income taxes ( and related margin ) is a non-gaap financial measure that reflects our income before income taxes excluding the impact of purchase accounting adjustments related to the acquisition of wlh , transaction expenses , loss on extinguishment of debt , inventory impairment and warranty charges and legal costs relating thereto and the write-off of our chicago operations , as applicable . ebitda and adjusted ebitda are non-gaap financial measures that measure performance by adjusting net income before allocation to non-controlling interests to exclude interest income/ ( expense ) , net , amortization of capitalized interest , income taxes , depreciation and amortization ( ebitda ) , non-cash compensation expense , if any , purchase accounting adjustments relating to the acquisition of wlh , transaction expenses , loss on extinguishment of debt , inventory impairment and warranty charges and legal costs relating thereto and the write-off of our chicago operations , as applicable.adjusted net income and adjusted earnings per share are non-gaap financial measures that reflect the net income available to the company excluding the impact of purchase accounting adjustments relating to the acquisition of wlh , transaction expenses , loss on extinguishment of debt , inventory impairment and warranty charges and legal costs relating thereto , the write-off of our chicago operations and the tax impact due to such adjustments , as applicable . net homebuilding debt to capitalization ratio is a non-gaap financial measure we calculate by dividing ( i ) total debt , less unamortized debt issuance costs/premiums and mortgage warehouse borrowings , net of unrestricted cash and cash equivalents , by ( ii ) total capitalization ( the sum of net homebuilding debt and total stockholders ' equity ) . adjusted home closings gross margin is a non-gaap financial measure based on gaap home closings gross margin ( which is inclusive of capitalized interest ) , excluding purchase accounting adjustments relating to the acquisition of wlh and inventory impairment and warranty charges , as applicable . management uses these non-gaap financial measures to evaluate our performance on a consolidated basis , as well as the performance of our regions , and to set targets for performance-based compensation . we also use the ratio of net homebuilding debt to total capitalization as an indicator of overall leverage and to evaluate our performance against other companies in the homebuilding industry . in the future , we may include additional adjustments in the above-described non-gaap financial measures to the extent we deem them appropriate and useful to management and investors . we believe that adjusted income before income taxes and related margin , adjusted net income and adjusted earnings per share , as well as ebitda and adjusted ebitda , are useful for investors in order to allow them to evaluate our operations without the effects of various items we do not believe are characteristic of our ongoing operations or performance and also because such metrics assist both investors and management in
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flow activities operating cash flow activities our net cash provided by operating activities was $ 1.1 billion for the year ended december 31 , 2020 compared to $ 393.2 million for the year ended december 31 , 2019. the increase in cash provided by operating activities was primarily attributable to an increase in homes closed and a decrease in real estate inventory , exclusive of real estate added as a result of wlh , and an increase in customer deposits . investing cash flow activities net cash used in investing activities was $ 312.8 million for the year ended december 31 , 2020 compared to net cash used in investing activities of $ 19.3 million for the year ended december 31 , 2019. the increase in cash used in investing activities for the year ended december 31 , 2020 was due to the acquisition of wlh . financing cash flow activities net cash used in financing activities was $ 604.9 million for the year ended december 31 , 2020 compared to $ 377.2 million for the year ended december 31 , 2019. the increase in cash used in financing activities was primarily due to our repayments of the 2023 6.00 % senior notes and 2025 5.875 % senior notes .
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in connection with the transaction , we entered into 15-year throughput agreements with shippers containing minimum annual revenue commitments to us of $ 25 million . legacy frontier pipeline and tankage asset transaction on november 9 , 2011 , we acquired from hfc certain tankage , loading rack and crude receiving assets located at hfc 's el dorado and cheyenne refineries . we paid non-cash consideration consisting of promissory notes with an aggregate principal amount of $ 150 million and 7,615,230 of our common units . in connection with the transaction , we entered into 15-year throughput agreements with hfc containing minimum annual revenue commitments to us of $ 48.3 million . agreements with hfc and alon we serve hfc 's refineries under long-term pipeline and terminal , tankage and throughput agreements expiring from 2019 to 2026. under these agreements , hfc agreed to transport , store and throughput volumes of refined product and crude oil on our pipelines and terminal , tankage and loading rack facilities that result in minimum annual payments to us . additionally , such agreements require hfc to reimburse us for certain costs . these minimum annual payments or revenues are subject to annual tariff rate adjustments on july 1 , based on the ppi or ferc index . as of december 31 , 2013 , these agreements with hfc will result in minimum annualized payments to us of $ 225.5 million . if hfc fails to meet its minimum volume commitments under the agreements in any quarter , it will be required to pay us in cash the amount of any shortfall by the last day of the month following the end of the quarter . under certain of the agreements , a shortfall payment may be applied as a credit in the following four quarters after minimum obligations are met . we have a pipelines and terminals agreement with alon expiring in 2020 under which alon has agreed to transport on our pipelines and throughput through our terminals volumes of refined products that result in a minimum level of annual revenue that also is - 39 - ril 19 , subject to annual tariff rate adjustments . also we have a capacity lease agreement under which we lease alon space on our orla to el paso pipeline for the shipment of refined product . the terms under this lease agreement expire beginning in 2018 through 2022. as of december 31 , 2013 , these agreements with alon will result in minimum annualized payments to us of $ 31.8 million . a significant reduction in revenues under these agreements could have a material adverse effect on our results of operations . under certain provisions of the omnibus agreement that we have with hfc , we pay hfc an annual administrative fee , currently $ 2.3 million , for the provision by hfc or its affiliates of various general and administrative services to us on behalf of hls . this fee does not include the salaries of personnel employed by hfc who perform services for us or the cost of their employee benefits , which are separately charged to us by hfc . we also reimburse hfc and its affiliates for direct expenses they incur on our behalf . - 40 - ril 19 , results of operations income , distributable cash flow and volumes the following tables present income , distributable cash flow and volume information for the years ended december 31 , 2013 , 2012 and 2011 . replace_table_token_11_th - 41 - ril 19 , replace_table_token_12_th - 42 - ril 19 , ( 1 ) net income attributable to hep is allocated between limited partners and the general partner interest in accordance with the provisions of the partnership agreement . hep net income allocated to the general partner includes incentive distributions that are declared subsequent to quarter end . after the amount of incentive distributions is allocated to the general partner , the remaining net income attributable to hep is allocated to the partners based on their weighted average ownership percentage during the period . ( 2 ) ebitda is calculated as net income attributable to holly energy partners plus ( i ) interest expense , net of interest income , ( ii ) state income tax and ( iii ) depreciation and amortization , excluding amounts related to predecessor . ebitda is not a calculation based upon gaap . however , the amounts included in the ebitda calculation are derived from amounts included in our consolidated financial statements , with the exception of ebitda from discontinued operations . ebitda should not be considered as an alternative to net income or operating income , as an indication of our operating performance or as an alternative to operating cash flow as a measure of liquidity . ebitda is not necessarily comparable to similarly titled measures of other companies . ebitda is presented here because it is a widely used financial indicator used by investors and analysts to measure performance . ebitda is also used by our management for internal analysis and as a basis for compliance with financial covenants . see our calculation of ebitda under item 6 , “ selected financial data . ” ( 3 ) distributable cash flow is not a calculation based upon gaap . however , the amounts included in the calculation are derived from amounts presented in our consolidated financial statements , with the general exceptions of a billed crude revenue settlement , maintenance capital expenditures and distributable cash flow from discontinued operations . distributable cash flow should not be considered in isolation or as an alternative to net income or operating income as an indication of our operating performance or as an alternative to operating cash flow as a measure of liquidity . distributable cash flow is not necessarily comparable to similarly titled measures of other companies . story_separator_special_tag the 2014 capital budget is comprised of $ 7.3 million for maintenance capital expenditures and $ 26.2 million for expansion capital expenditures . we expect to spend approximately $ 52 million in cash for capital projects approved in 2014 plus those approved in prior years but not yet completed , including the expansion of our crude oil transportation system in southeastern new mexico and the unev project discussed below . in addition to our capital budget , we may spend funds periodically to perform capital upgrades to our assets where a customer reimburses us for such costs . these reimbursements would be required under contractual agreements , and the upgrades would generally benefit the customer over the remaining life of such agreements . we are proceeding with the expansion of our crude oil transportation system in southeastern new mexico in response to increased crude oil production in the area . the expansion should provide shippers with additional pipeline takeaway capacity to either common carrier pipeline stations for transportation to major crude oil markets or to hfc 's new mexico refining facilities . to complete the project , we are converting an existing refined products pipeline to crude oil service , constructing several new pipeline segments , expanding an existing pipeline , and building new truck unloading stations and crude storage capacity . excluding the value of the existing pipeline to be converted , total capital expenditures are expected to be between $ 45 million and $ 50 million . we expect that the increase over the original budget range of $ 35 million to $ 40 million will be recovered from hfc over a five year period through an additional fee on shipped volumes . we estimate the project will provide increased capacity of up to 100,000 barrels per day across the system and anticipate it will be in full service no later than august 2014. unev is proceeding with a project to enhance its product terminal in las vegas , nevada . we expect that the project will cost approximately $ 13 million with construction expected to be completed no later than the second quarter of 2014. hfc and we are collaborating to evaluate the construction of a rail facility that would enable crude oil loading and unloading near hfc 's artesia and or lovington , new mexico refining facilities . the rail project , which would be connected to our crude oil pipeline transportation system in southeastern new mexico , would have an initial capacity of up to 70,000 barrels per day and would enable access to a variety of crude oil types including west texas intermediate ( wti ) , west texas sour ( wts ) and western canadian select ( wcs ) . the project would provide both additional crude oil takeaway options for producers as crude production in the region continues to grow , and an expanded set of crude oil sourcing options for hfc . we anticipate project completion would take nine to twelve months once the decision to proceed is made . our decision to proceed with this project is dependent upon shipper interest , which at present does not support project completion . we expect that our currently planned sustaining and maintenance capital expenditures , as well as expenditures for acquisitions and capital development projects will be funded with existing cash generated by operations , the sale of additional limited partner common units , the issuance of debt securities and advances under our credit agreement , or a combination thereof . with volatility and uncertainty at times in the credit and equity markets , there may be limits on our ability to issue new debt or equity financing . additionally , due to pricing movements in the debt and equity markets , we may not be able to issue new debt and equity securities at acceptable pricing . without additional capital beyond amounts available under the credit agreement , our ability to obtain funds for some of these capital projects may be limited . - 48 - ril 19 , on july 12 , 2012 , we acquired hfc 's 75 % interest in unev . we paid consideration consisting of $ 260.0 million in cash and 2,059,800 of our common units . we paid an additional $ 0.9 million to hfc for a post-closing working capital adjustment . also under the terms of the transaction , we issued to hfc a class b unit comprising a noncontrolling equity interest in a wholly-owned subsidiary subject to redemption to the extent that hfc is entitled to a 50 % interest in our share of annual unev earnings before interest , income taxes , depreciation , and amortization above $ 30 million beginning july 1 , 2016 and ending in june 2032 , subject to certain limitations . credit agreement on november 22 , 2013 , we amended our credit agreement increasing the size of the credit facility from $ 550.0 million to $ 650.0 million . our $ 650.0 million senior secured revolving credit facility expires in november 2018 ( the “ credit agreement ” ) and is available to fund capital expenditures , investments , acquisitions , distribution payments and working capital and for general partnership purposes . it is also available to fund letters of credit up to a $ 50 million sub-limit . our obligations under the credit agreement are collateralized by substantially all of our assets . indebtedness under the credit agreement is recourse to hep logistics holdings , l.p. ( “ hep logistics ” ) , our general partner , and guaranteed by our material wholly-owned subsidiaries . any recourse to hep logistics would be limited to the extent of its assets , which other than its investment in us , are not significant . we may prepay all loans at any time without penalty , except for payment of certain breakage and related costs . indebtedness under the credit agreement bears interest , at our option ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash and cash equivalents increased by $ 1.1 million during the year ended december 31 , 2013 . the cash flows provided by operating activities of $ 183.1 million were greater than the cash flows used for financing and investing activities of $ 132.9 million and $ 49.1 million , respectively . working capital decreased by $ 18.4 million to a deficit of $ 6.6 million at december 31 , 2013 from $ 11.8 million at december 31 , 2012 . cash flows—operating activities year ended december 31 , 2013 compared with year ended december 31 , 2012 cash flows from operating activities increased by $ 21.9 million from $ 161.1 million for the year ended december 31 , 2012 to $ 183.1 million for the year ended december 31 , 2013 . this increase is due principally to $ 30.7 million of greater cash receipts for services performed in the year ended december 31 , 2013 as compared to the prior year , partially offset by payments made for increased operating expenses . our major shippers are obligated to make deficiency payments to us if they do not meet their minimum volume shipping obligations . under certain agreements with these shippers , they have the right to recapture these amounts if future volumes exceed minimum levels . we billed $ 7.8 million during the year ended december 31 , 2012 related to shortfalls that subsequently expired without recapture and were recognized as revenue during the year ended december 31 , 2013. another $ 12.0 million is included as deferred revenue on our balance sheet at december 31 , 2013 related to shortfalls billed during the year ended december 31 , 2013 .
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% to sales . the impact of foreign exchange rates was unfavorable in 2012 , reducing sales 1.5 % . replace_table_token_3_th in 2012 , gross profit increased 6.3 % , however our gross profit margin declined 90 basis points . in fiscal year 2012 , we were able to offset the dollar impact of a high single digit increase in raw material and packaging costs with our pricing actions and cci cost savings . in 2012 , cci cost savings totaled $ 56 million of which $ 39 million lowered cost of goods sold . while pricing and cci cost savings offset the dollar impact of increased material costs , the net impact of these factors caused downward pressure on gross profit as a percentage of net sales . margins were further pressured by our mix of sales in 2012 , as sales in international markets grew at a faster rate than in the u.s. , where our gross profit margin is higher due to larger scale and less complexity . in 2013 we expect material cost inflation to moderate to an increase of approximately 3 % . due to the low interest rate environment , retirement benefit expense is expected to increase by $ 22 million in 2013. about 40 % of this increase is expected to impact cost of goods sold . replace_table_token_4_th selling , general and administrative expenses increased 5.8 % in 2012 from 2011 , but decreased as a percentage of net sales for those same time periods . the decrease in sg & a as a percent of net sales was primarily driven by a leveraging effect of our higher sales on these costs . we had a benefit from cci cost savings that lowered sg & a $ 17 million in 2012 and a favorable comparison to 2011 when sg & a included $ 10.9 million of transaction costs related to completed acquisitions , while 2012 had only $ 1.7 million of such costs . during 2012 , we increased brand marketing support by $ 11.0 million to $ 198.3 million . a large portion of this increase was in digital marketing , which is one of our highest return investments in brand marketing support . in 2013 , due to the low interest rate environment , retirement benefit expense is expected to increase by $ 22 million . about 60 % of this increase is expected to impact sg & a . replace_table_token_5_th interest expense for 2012 was higher than the prior year . the impact of higher average debt balances in 2012 compared to 2011 was partially offset by the impact of lower interest rates for 2012 compared to 2011. the higher average debt balances in 2012 were due to the acquisitions completed late in 2011. replace_table_token_6_th in 2012 , we repatriated $ 70.0 million of cash from foreign subsidiaries . this transaction generated u.s. foreign tax credits due to the mix of foreign earnings that related to this cash . these u.s. foreign tax credits reduced 2012 tax expense by $ 9.7 million and were the major driving factor in a reduction in the tax rate for 2012 as compared to the prior year . discrete tax benefits in 2012 were $ 2.0 million compared to $ 0.8 million in 2011. the increase in 2012 is mainly due to the reversal of a portion of a valuation allowance originally established against a subsidiary 's net operating losses . this subsidiary has established a pattern of profitability which resulted in us concluding that a portion of the valuation allowance should be reversed . in 2010 , the internal revenue service ( irs ) commenced an examination of our u.s. federal income tax return for the 2007 and 2008 tax years . during the course of the examination , we held discussions with the irs on certain issues and in october 2012 we received proposed adjustments for these tax years . in november 2012 we deposited $ 18.8 million with the irs to stop any potential interest on these proposed adjustments . we believe we have established appropriate deferred taxes or tax accruals under us gaap for these issues in prior periods . while it is often difficult to predict the final outcome or the timing of resolution of uncertain tax positions , we believe that our unrecognized tax benefits reflect the most likely outcome . we will continue to update these unrecognized tax benefits , and the related interest , in light of changing facts and circumstances in the future . in addition , see note 10 of the financial statements for a reconciliation of the u.s. federal statutory tax rate with the effective tax rate . replace_table_token_7_th income from unconsolidated operations decreased $ 3.9 million in 2012 compared to 2011. most of this decrease is attributable to our largest joint venture , mccormick de mexico , which was negatively impacted by an unfavorable foreign exchange rate between the mexican peso an the u.s. dollar for most of 2012. while this business grew sales 6 % , profits were also pressured by higher soybean oil cost ( a main ingredient for mayonnaise which is the leading product for this joint venture ) . this situation began in the fourth quarter of 2011 and the year-on-year impact in the fourth quarter of 2012 had eased . in 2012 , our mccormick de mexico joint venture represented 59 % of the sales and 82 % of the net income of our unconsolidated joint ventures . we own a 26 % share in our eastern condiments joint venture and on average own 50 % of our other unconsolidated joint ventures . story_separator_special_tag strong sales to food manufacturers were driven in part by the development of new products and increased demand for snack seasonings and ingredients , particularly in the u.s. and mexico . while sales to the foodservice industry were favorably impacted by product introductions , a number of our customers were impacted by the weak economy . both food manufacturers and foodservice customers continue to have an interest in products that feature all natural ingredients , reduced sodium and other healthy attributes . these types of projects accounted for 40 % of our product development activity in the u.s. during 2011. in emea , industrial business sales rose 12.3 % , with a 5.8 % increase from favorable volume and product mix , 2.9 % from pricing actions and 3.6 % from favorable foreign exchange rates . as in 2010 , demand from quick service restaurants was high and continued to be the key sales driver in this region . we had particular strength in the sales of products that we manufacture in our facilities in the u.k. , turkey and south africa for these customers , and supported their expansion in russia and the middle east . industrial business sales in the asia/pacific region rose 22.0 % . favorable volume and product mix grew sales 10.7 % , favorable foreign exchange rates added 9.0 % and increased pricing actions added 2.3 % . as in emea , sales to quick service restaurants were a source of strong growth in 2011. the rapid expansion of quick service restaurants in this region and our new product activity contributed to a 15 % increase of industrial business sales in china when measured in local currency . we also supported the expansion of quick service restaurants into india , further adding to our sales growth in this region . industrial business operating income increased $ 4.5 million to $ 111.9 million , a 4.2 % increase from 2010. the profit impact of higher sales and cci cost savings were offset in part by increased material costs and an investment in our branded foodservice business with $ 5 million of incremental marketing support . the net effect of these items , along with our sales mix of products during 2011 , led to a decline in industrial business operating income margin to 7.5 % from 8.0 % in 2011. since 2005 we have improved the operating income margin of this business and expect to achieve further improvements in margin in a less volatile input cost environment and as a result of our development of more value-added , higher margin new products . non-gaap financial measures the tables below include financial measures of net income and diluted earnings per share excluding the benefit of the reversal of a significant tax accrual in 2010. there were no adjustments to 2012 or 2011 financial results . this is a non-gaap financial measure which is prepared as a complement to our financial results prepared in accordance with united states generally accepted accounting principles . we believe this non-gaap information is important for purposes of comparison to prior periods and development of future projections and earnings growth prospects . this information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends . in 2010 our discrete tax benefits included a $ 13.9 million reversal of a tax accrual for a closed tax year . this tax accrual was recorded in a prior period based on uncertainties about the tax aspects of transactions related to the reorganization of our european operations and divestment of certain of our joint ventures . we are treating this $ 13.9 million discrete tax benefit as a non-gaap adjustment to our diluted earnings per share . we are providing non-gaap results that exclude the impact of this reversal as the item to which it relates was recorded as a restructuring charge , and it allows for a better comparison of 2010 financial results to 2011 and 2012. when we had restructuring charges in periods prior to 2010 we used non-gaap financial measures to display earnings exclusive of these restructuring charges . these non-gaap measures may be considered in addition to results prepared in accordance with gaap , but they should not be considered a substitute for , or superior to , gaap results . we intend to continue to provide these non-gaap financial measures as part of our future earnings discussions and , therefore , the inclusion of these non-gaap financial measures will provide consistency in our financial reporting . a reconciliation of these non-gaap measures to gaap financial results is provided below . replace_table_token_20_th in addition to the non-gaap measures for net income and diluted earnings per share , we use total debt to earnings before interest , tax , depreciation and amortization ( ebitda ) as a measure of leverage . ebitda and the ratio of total debt to ebitda are both non-gaap financial measures . this ratio measures our ability to repay outstanding debt obligations . our target for total debt to ebitda , excluding the temporary impact from acquisition activity , is 1.5 to 1.7. we believe that total debt to ebitda is a meaningful metric to investors in evaluating our financial leverage and may be different than the method used by other companies to calculate total debt to ebitda . we define ebitda as net income plus expenses of interest , income taxes , depreciation and amortization . the following table reconciles our ebitda to our net income : replace_table_token_21_th story_separator_special_tag conjunction with acquisition activity and subsequent reduction of that debt . in 2011 , we increased our debt levels to help fund our kohinoor , kamis and kitchen basics acquisitions . during 2012 , the debt associated with these acquisitions was reduced to bring our total debt to ebitda within our target range of 1.5 to 1.7. most of our cash is in our foreign subsidiaries . we manage our
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and financial condition replace_table_token_22_th we generate strong cash flow from operations which enables us to fund operating projects and investments that are designed to meet our growth objectives , increase our dividend , fund capital projects and make share repurchases when appropriate . in 2013 , we expect to continue our share repurchase activity and use a portion of our cash flow from operations to help fund our acquisition of wuhan asia-pacific condiments co. , ltd. , which is expected to close mid-year . in the cash flow statement , the changes in operating assets and liabilities are presented excluding the effects of changes in foreign currency exchange rates , as these do not reflect actual cash flows . accordingly , the amounts in the cash flow statement do not agree with changes in the operating assets and liabilities that are presented in the balance sheet . the reported values of our assets and liabilities held in our non-u.s. subsidiaries and affiliates can be significantly affected by fluctuations in foreign exchange rates between periods . at november 30 , 2012 , the exchange rates for the canadian dollar , australian dollar , polish zloty and british pound sterling were slightly higher versus the u.s. dollar compared to 2011. at november 30 , 2012 , the exchange rate for the euro and indian rupee versus the u.s. dollar were lower than at november 30 , 2011. operating cash flow – when 2012 is compared to 2011 , the increase in operating cash flow was led by a small decrease in inventory , whereas in 2011 we had a significant increase in inventory . in addition , we generated cash from higher net income in 2012. our total pension contributions were $ 104.3 million in 2012 as compared to $ 42.7 million in 2011 , which provided a partial offset to the increases noted above . when 2011 is compared to 2010 , the decrease in operating cash flow was driven by a higher level of inventory in 2011 as compared to the prior year .
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on november 14 , 2018 , in connection with the 2018 offering , we issued 2,702,500 shares of our common stock , par value $ 0.01 per share , at a public offering price of $ 33.00 per share , for net proceeds of approximately $ 84.8 million ( after underwriters ' discounts and offering costs ) . we contributed the net proceeds from the 2018 offering to the op in exchange for 2,702,500 op units , and the op in turn used a majority of the net proceeds to repay the $ 50.0 million outstanding under the $ 60 million credit facility and the $ 30.0 million outstanding under the $ 30 million bridge facility ( see notes 6 and 8 to our consolidated financial statements ) . we have elected to be taxed as a reit under sections 856 through 860 of the code , and expect to continue to qualify as a reit . to qualify as a reit , we must meet a number of organizational and operational requirements , including a requirement that we distribute at least 90 % of our reit taxable income to our stockholders . as a reit , we will be subject to federal income tax on our undistributed reit taxable income and net capital gain and to a 4 % nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of ( 1 ) 85 % of our ordinary income , ( 2 ) 95 % of our capital gain net income and ( 3 ) 100 % of our undistributed income from prior years . we believe we qualify for taxation as a reit under the code , and we intend to continue to operate in such a manner , but no assurance can be given that we will operate in a manner so as to qualify as a reit . taxable income from certain non-reit activities is managed through a trs and is subject to applicable federal , state , and local income and margin taxes . we had no significant taxes associated with our trs for the years ended december 31 , 2018 , 2017 and 2016 . 48 components of our revenues and expenses revenues rental income . our earnings are primarily attributable to the rental revenue from our multifamily properties . we anticipate that the leases we enter into for our multifamily properties will typically be for one year or less on average . other income . other income includes ancillary income earned from tenants such as application fees , late fees , laundry fees , utility reimbursements , and other rental related fees charged to tenants . expenses property operating expenses . property operating expenses include property maintenance costs , salary and employee benefit costs , utilities , casualty-related expenses and recoveries and other property operating costs . acquisition costs . acquisition costs include the costs to acquire additional properties . on october 1 , 2016 , we early adopted accounting standards update ( “ asu ” ) 2017-01 , which requires an entity to capitalize acquisition costs associated with an acquisition that is determined to be an acquisition of an asset as opposed to an acquisition of a business . prior to our adoption of asu 2017-01 , acquisition costs were expensed as incurred . we believe most future acquisition costs will be capitalized in accordance with asu 2017-01 . real estate taxes and insurance . real estate taxes include the property taxes assessed by local and state authorities depending on the location of each property . insurance includes the cost of commercial , general liability , and other needed insurance for each property . property management fees . property management fees include fees paid to bh , our property manager , or other third party management companies for managing each property ( see note 10 to our consolidated financial statements ) . advisory and administrative fees . advisory and administrative fees include the fees paid to our adviser pursuant to the advisory agreement ( see note 11 to our consolidated financial statements ) . corporate general and administrative expenses . corporate general and administrative expenses include , but are not limited to , audit fees , legal fees , listing fees , board of director fees , equity-based compensation expense , investor relations costs and payments of reimbursements to our adviser for operating expenses . corporate general and administrative expenses and the advisory and administrative fees paid to our adviser ( including advisory and administrative fees on properties defined in the advisory agreement as new assets ) will not exceed 1.5 % of average real estate assets per calendar year ( or part thereof that the advisory agreement is in effect ) , calculated in accordance with the advisory agreement , or the expense cap . the expense cap does not limit the reimbursement by us of expenses related to securities offerings paid by our adviser . the expense cap also does not apply to legal , accounting , financial , due diligence , and other service fees incurred in connection with mergers and acquisitions , extraordinary litigation , or other events outside our ordinary course of business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of real estate assets . property general and administrative expenses . property general and administrative expenses include the costs of marketing , professional fees , general office supplies , and other administrative related costs of each property . depreciation and amortization . depreciation and amortization costs primarily include depreciation of our multifamily properties and amortization of acquired in-place leases . other income and expense interest expense . interest expense primarily includes the cost of interest expense on debt , the amortization of deferred financing costs and the related impact of interest rate derivatives used to manage our interest rate risk . story_separator_special_tag property taxes incurred in the first year of ownership may be significantly less than subsequent years since the purchase price of the property may trigger a significant increase in assessed value by the taxing authority in subsequent years , increasing the cost of real estate taxes . property management fees . property management fees were $ 4.3 million for the year ended december 31 , 2017 compared to $ 4.0 million for the year ended december 31 , 2016 , which was an increase of approximately $ 0.3 million . the increase between the periods was primarily due to increases in rental income and other income , which the fee is primarily based on . advisory and administrative fees . advisory and administrative fees were $ 7.4 million for the year ended december 31 , 2017 compared to $ 6.8 million for the year ended december 31 , 2016 , which was an increase of approximately $ 0.6 million . the amount incurred during the years ended december 31 , 2017 and 2016 represents the maximum fee allowed on properties defined as contributed assets under the advisory agreement plus approximately $ 2.0 million and $ 1.4 million , respectively , of advisory and administrative fees incurred on certain properties defined as new assets . for the year ended december 31 , 2017 , our adviser elected to voluntarily waive the advisory and administrative fees incurred on the five properties we acquired subsequent to october 2016 , which totaled approximately $ 2.4 million . for the year ended december 31 , 2016 , our adviser elected to voluntarily waive the advisory and administrative fees incurred on the two properties we acquired subsequent to october 2016 , which totaled less than $ 0.1 million . the advisory and administrative fees waived by our adviser for the years ended december 31 , 2017 and 2016 are considered to be permanently waived for the periods . our adviser is not contractually obligated to waive fees on new assets in the future and may cease waiving fees on new assets at its discretion . advisory and administrative fees may increase in future periods as we acquire additional properties , which will be classified as new assets . corporate general and administrative expenses . corporate general and administrative expenses were $ 6.3 million for the year ended december 31 , 2017 compared to $ 4.0 million for the year ended december 31 , 2016 , which was an increase of approximately $ 2.3 million . the increase between periods primarily relates to $ 3.1 million of equity-based compensation expense recognized during the year ended december 31 , 2017 related to the grants of restricted stock units to our directors and officers pursuant to our 2016 ltip , compared to $ 0.8 million of equity-based compensation expense recognized during the year ended december 31 , 2016 ( see note 8 to our consolidated financial statements ) . subject to the expense cap , corporate general and administrative expenses may increase in future periods as we acquire additional properties . property general and administrative expenses . property general and administrative expenses were $ 6.2 million for the year ended december 31 , 2017 compared to $ 5.9 million for the year ended december 31 , 2016 , which was an increase of approximately $ 0.3 million . the increase between the periods was primarily due to our acquisition and disposition activity in 2016 and 2017 and the timing of the transactions , as described above . the increase between the periods was also due to a $ 0.3 million , or 24.4 % , increase in advertising and promotional costs . 53 depreciation and amortization . depreciation and amortization costs were $ 48.8 million for the year ended december 31 , 2017 compared to $ 35.6 million for the year ended december 31 , 2016 , which was an increase of approximately $ 13.2 million . the increase between the periods was primaril y due to the amortization of intangible lease assets of $ 8.9 million related to seven properties for the year ended december 31 , 2017 compared to $ 1.4 million related to five properties for the year ended december 31 , 2016 , which was an increase of approxi mately $ 7.5 million , as well as the acquisition of three properties subsequent to december 31 , 2016. the amortization of intangible lease assets over a six-month period from the date of acquisition is expected to increase the amortization expense during th e initial year of operations for each property . the increase between the periods was partially offset by a reduction in depreciation expense related to the disposition of nine properties subsequent to december 31 , 2016. other income and expense interest expense . interest expense was $ 29.6 million for the year ended december 31 , 2017 compared to $ 20.2 million for the year ended december 31 , 2016 , which was an increase of approximately $ 9.4 million . the increase between the periods was primarily due to an increase in interest on debt and a reduction in gain recognized related to the ineffective portion of changes in fair value of our interest rate swap derivatives designated as cash flow hedges ( see “ debt , derivatives and hedging activity – interest rate swap agreements ” below ) , as shown in the table below . the following table details the various costs included in interest expense for the years ended december 31 , 2017 and 2016 ( in thousands ) : replace_table_token_15_th loss on extinguishment of debt and modification costs . loss on extinguishment of debt and modification costs was $ 5.7 million for the year ended december 31 , 2017 compared to $ 1.7 million for the year ended december 31 , 2016 , which was an increase of approximately $ 4.0 million . the increase between the periods was primarily due to increases in prepayment penalties and defeasance
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows from operating activities . during the year ended december 31 , 2018 , net cash provided by operating activities was $ 41.7 million compared to net cash provided by operating activities of $ 37.5 million for the year ended december 31 , 2017. the change in cash flows from operating activities was mainly due to an increase in total revenues , decreases in total property operating expenses , prepayment penalties and defeasance costs and debt modification and other extinguishment costs paid and changes in operating assets and liabilities . cash flows from investing activities . during the year ended december 31 , 2018 , net cash used in investing activities was $ 137.0 million compared to net cash provided by investing activities of $ 2.3 million for the year ended december 31 , 2017. the change in cash flows from investing activities was mainly due to a decrease in net proceeds from sales of real estate . we sold one property for net proceeds of approximately $ 29.6 million during the period in 2018 ; we sold nine properties for net proceeds of approximately $ 224.4 million during the period in 2017. the change in cash flows from investing activities was partially offset by the acquisition of three properties for a combined purchase price of approximately $ 131.0 million during the period in 2018 compared to the acquisition of three properties for a combined purchase price of approximately $ 197.2 million during the period in 2017. cash flows from financing activities .
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on july 16 , 2018 , following the consummation of the underwritten public offering , the holders of our shares of series a convertible preferred stock exchanged an aggregate of $ 7,871,186 of stated value and accrued but unpaid dividends on their shares for an aggregate of 3,748,184 shares of our common stock and warrants to purchase an aggregate of 3,748,184 shares of our common stock . as a result of such exchange , there are no longer any shares of series a convertible preferred stock issued and outstanding . the warrants have an exercise price of $ 2.10 per share and a term of five years . in addition , pursuant to certain anti-dilution provisions included in warrants issued to the holders of our series a convertible preferred stock in march and may 2018 , or pipe warrants , the exercise price of the pipe warrants was automatically adjusted to $ 2.10 per share from the original exercise price of $ 6.59 per share . 84 on november 5 , 2018 , we entered into a settlement agreement with jgb ( cayman ) newton , ltd. , or jgb , regarding our counterclaims against jgb that were asserted in the litigation originally commenced by jgb in april 2018. as part of the settlement , jgb paid us approximately $ 6.6 million in exchange for a full discharge of all counterclaims asserted by us against jgb in the litigation . we and jgb also agreed to terminate the senior secured debenture agreement and all related agreements , and jgb released all of its interests in the collateral for the senior secured debenture . see note 8 to the consolidated financial statements for a description of the litigation and settlement agreement . overview we are a clinical-stage biopharmaceutical company focused on developing novel cancer immunotherapeutics for a broad range of cancer indications . our product candidates currently include galinpepimut-s and nelipepimut-s. galinpepimut-s , or gps our lead product candidate , galinpepimut-s , or gps , is a cancer immunotherapeutic agent licensed from memorial sloan kettering cancer center , or msk , that targets the wilms tumor 1 , or wt1 , protein , which is present in 20 or more cancer types . based on its mechanism of action as a directly immunizing agent , gps has potential as a monotherapy or in combination with other immunotherapeutic agents to address a broad spectrum of hematologic , or blood , cancers and solid tumor indications . in november 2018 , following discussions with the u.s. food and drug administration , or fda , regarding a clinical trial design and biostatistical plan , we commenced preparations for a phase 3 trial for gps monotherapy in patients with acute myeloid leukemia , or aml , in the maintenance setting after achievement of their second complete remission , or crem2 , following successful completion of second-line antileukemic therapy . this trial is expected to serve as the basis for a biologics license application , or bla , submission , subject to positive results . we are currently ready to start this phase 3 trial , pending receipt of sufficient funding . we plan to enroll approximately 116 patients at approximately 50 clinical sites in the united states and europe and is contemplated to have a planned interim safety and futility analysis after 80 events ( deaths ) . in december 2018 , we initiated a phase 1/2 multi-arm ( ‘ basket ' type ) clinical study of gps in combination with merck & co. , inc. 's anti-pd-1 therapy , keytruda® ( pembrolizumab ) . we plan to enroll approximately 90 patients at up to 20 centers in the united states . the initial tumor types to be treated will be aml ( in patients having achieved partial response as their best hematological response after four cycles of therapy with hypomethylating agents ) , and ovarian cancer ( second or third line ) , to be followed by triple negative breast cancer , or tnbc , ( second line ) , small cell lung cancer , or sclc ( second line ) , and colorectal cancer ( third or fourth line ) . gps was granted orphan drug product designations from the fda as well as orphan medicinal product designations from the european medicines agency , or ema , for gps in aml , malignant pleural mesothelioma , or mpm , and multiple myeloma , or mm , as well as fast track designation for aml , mpm , and mm from the fda . nelipepimut-s or nps nelipepimut-s , or nps , is a cancer immunotherapy targeting the human epidermal growth factor receptor , or her2 , expressing cancers . in 2018 we presented data from our phase 2b study of the combination of trastuzumab plus nps in her 1+/2+ breast cancer patients in the adjuvant setting to prevent recurrences that showed a clinically and statistically significant improvement in the dfs rate for the tnbc cohort at 24 months for patients treated with nps plus trastuzumab of 92.6 % compared to 70.2 % for those treated with trastuzumab alone . in october 2018 , the dsmb , unanimously concluded that the final analysis of the phase 2b study data , with a median follow-up of 26 months , confirmed that tnbc patients should be the key target population for the development of trastuzumab plus nps in the adjuvant setting in early-stage her2 1+/2+ breast cancer patients . we are having ongoing discussions with the fda to define an optimal path for further development of the combination of nps plus trastuzumab in tnbc and expect to complete these discussions in the first half of 2019 . 85 fbp-targeting bivalent vaccine ( gale-301/-302 ) gale-301 and gale 302 are cancer immunotherapies that target the e39 peptide derived from the folate binding protein , or fbp . story_separator_special_tag million increase in insurance premiums , $ 0.4 million increase in rebates and returns of former commercial products , and a $ 0.5 million increase in other expenses . such increases during 2018 are a result of an increase in accounting , consulting , and tax-related services associated with maintaining compliance with nasdaq and sec reporting requirements , investor relations costs , and director and officer insurance premiums associated with being a public company . 91 asset impairment in january 2014 , galena , our predecessor-in-interest , acquired the worldwide rights to develop and commercialize anagrelide cr formulation ( gale-401 ) through its acquisition of mills pharmaceuticals , llc , or mills . the license agreement ( “ bvi agreement ” ) for gale-401 between mills and biovascular , inc. ( “ biovascular ” ) provides that mills may terminate the bvi agreement by providing 60 days written notice to biovascular . on december 5 , 2018 , our board of directors approved the termination of the bvi agreement and we , on behalf of mills , provided written notice of such termination to biovascular and confirmed that mills will no longer support or pursue the filing , prosecution , or maintenance of any patent covered in the bvi agreement . we previously disclosed that management had been evaluating gale-401 , among other items , for potential internal development , strategic partnership , or other types of product rationalizations and determined that further development of gale-401 is outside of the scope of our core focus on cancer immunotherapy/cancer vaccine development . we recognized asset impairment expenses of approximately $ 9.6 million for the year ended december 31 , 2018 . included in the asset impairment expenses are a non-cash charge of approximately $ 9.1 million for impairment of intangible assets recorded as in-process research and development and an additional $ 0.5 million of milestone payments recorded as deposits and other assets . severance costs related to merger there were no severance costs related to the merger for the year ended december 31 , 2018. severance costs incurred during the year ended december 31 , 2017 include employee-related costs for severance of certain former galena employees of approximately $ 1.9 million . the amount was paid by galena prior to the consummation of the merger and subsequently recognized as an expense by the combined company immediately following the closing of the merger . such termination resulted in contingent consideration being paid out in the form of severance based on change of control provisions in their employment agreements . their employment agreements all required both a change of control and termination of employment , or a double trigger in connection with the payment of such severance amounts . since there was a change of control as a result of the merger and galena terminated all employees prior to the closing , with both provisions of the double trigger were satisfied and the severance is treated as an action triggered by the accounting acquirer , private sellas . non-operating income ( expense ) , net non-operating income ( expense ) , net for the years ended december 31 , 2018 and 2017 , respectively , was as follows ( dollars in thousands ) : replace_table_token_2_th the increase in our net non-operating income ( expense ) during the year ended december 31 , 2018 compared to the year ended december 31 , 2017 was primarily due to a $ 5.3 million gain arising from the decrease in the fair value of liability-classified warrants to acquire shares of our common stock and a $ 0.8 million gain on extinguishment of debt . the decrease in the estimated fair value of our warrant liability was primarily due to the decrease in our common stock price . the $ 0.8 million gain on extinguishment of debt relates to the settlement with jgb , the holder of our former senior secured debenture . as a result of the settlement , the $ 0.8 million of additional interest that was due at maturity was forgiven . see note 10 to the consolidated financial statements included elsewhere in this annual report on form 10-k for a description of the litigation and settlement agreement . 92 these amounts were partially offset by a $ 3.0 million increase in the fair value of the contingent consideration liability and a $ 0.7 million loss on settlement of liability-classified awards . the change in the estimated fair value of the contingent consideration during the year ended december 31 , 2018 reflects an adjusted probability and time-line for the potential approval of nps associated with the positive interim data from the phase 2b investigator-sponsored clinical trial of trastuzumab +/- nps in her2 1+/2+ breast cancer patients that was announced on april 2 , 2018. the $ 0.7 million loss on settlement of liability-classified warrants relates to warrants to acquire shares of common stock issued by galena in february 2017 that were assumed in the merger . during the year ended december 31 , 2018 , a total of 534,333 of the liability-classified warrants were canceled under various warrant exchange agreements , as further described herein . we issued 54,343 shares of our common stock in exchange for the surrender and cancellation of warrants to acquire 121,667 shares of our common stock and $ 1.0 million in convertible promissory notes in exchange for the surrender and cancellation of warrants to acquire 412,667 shares of our common stock , as described in note 12 to the consolidated financial statements included elsewhere in this annual report on form 10-k. the fair value of the consideration exchanged which totaled approximately $ 1.3 million exceeded the fair value of the warrant liability of the canceled warrants by $ 0.7 million and is recorded as loss on settlement of liability-classified warrants in the consolidated statement of operations for the year ended december 31 , 2018 . interest expense , net for the years ended december 31 , 2018 and 2017 primarily
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources we have not generated any revenue from product sales or collaboration and licensing agreements in the years ended december 31 , 2018 and 2017. since inception , we have incurred net losses , used net cash from our operations , and have funded substantially all of our operations through proceeds from sale of debt and equity securities . on march 6 , 2019 , we entered into a warrant exercise agreement , or the exercise agreement , with one of the holders of our warrants issued in july 2018. pursuant to the exercise agreement , such holder agreed that it would cash exercise up to 3,800,000 of its warrants issued in july 2018 into shares of common stock at a reduced exercise price of $ 1.10 per share for any warrants exercised prior to may 31 , 2019. in addition to reducing the exercise price of the warrants , the exercise agreement also provides for the issuance of new warrants to purchase up to an aggregate of approximately 3,800,000 shares of common stock at an exercise price of $ 1.40 per share , or new warrants , to be issued on a share-for-share basis in an amount equal to the number of the warrants that are cash exercised by the holder by may 31 , 2019. to date , the holder has exercised approximately 1.2 million warrants for gross proceeds of $ 1.3 million and approximately 1.2 million new warrants were issued . under the terms of the warrant exchange agreement , we may receive aggregate gross proceeds of up to approximately $ 4.2 million from the cash exercise if all of the warrants under the exercise agreement are exercised . on july 16 , 2018 , we completed an underwritten public offering , or the july 2018 offering , pursuant to which we sold ( i ) 6,845,000 shares of common stock , ( ii ) 4,675,000 pre-funded warrants exercisable for shares of common stock and ( iii ) accompanying common stock warrants to purchase an aggregate of 11,520,000 shares of common stock .
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as an energy infrastructure owner and operator in multiple facets of the various u.s. and canadian energy industries and markets , we examine a number of variables and factors on a routine basis to evaluate our current performance and our prospects for the future . with respect to our interstate natural gas pipelines , related storage facilities and lng terminals , the revenues from these assets are primarily received under contracts with terms that are fixed for various and extended periods of time . to the extent practicable and economically feasible in light of our strategic plans and other factors , we generally attempt to mitigate risk of reduced volumes and prices by negotiating contracts with longer terms , with higher per-unit pricing and for a greater percentage of our available capacity . these long-term contracts are typically structured with a fixed-fee reserving the right to transport natural gas and specify that we receive the majority of our fee for making the capacity available , whether or not the customer actually chooses to utilize the capacity . similarly , the texas intrastate natural gas pipeline operations , currently derives approximately 73 % of its sales and transport margins from long-term transport and sales contracts . as contracts expire , we have additional exposure to the longer term trends in supply and demand for natural gas . as of december 31 , 2015 , the remaining average contract life of our natural gas transportation contracts ( including intrastate pipelines ' purchase and sales contracts ) was approximately six years . our midstream assets provide gathering and processing services for natural gas and gathering services for crude oil . these assets are generally fee-based and the revenues and earnings we realize from gathering natural gas , processing natural gas in order to remove ngl from the natural gas stream , and fractionating ngl into their base components , are affected by the volumes of natural gas made available to our systems . such volumes are impacted by producer rig count and drilling activity . in addition to fee based arrangements , we also provide some services based on percent-of-proceeds , percent-of-index and keep-whole contracts some of which may include minimum volume requirements . our service contracts may rely solely on a single type of arrangement , but more often they combine elements of two or more of the above , which helps us and our counterparties manage the extent to which each shares in the potential risks and benefits of changing commodity prices . the co 2 source and transportation business primarily has third-party contracts with minimum volume requirements , which as of december 31 , 2015 , had a remaining average contract life of approximately nine years . co 2 sales contracts vary from customer to customer and have evolved over time as supply and demand conditions have changed . our recent contracts have generally provided for a delivered price tied to the price of crude oil , but with a floor price . on a volume-weighted basis , for third-party contracts making deliveries in 2016 , and utilizing the average oil price per barrel contained in our 2016 budget , approximately 99 % of our revenue is based on a fixed fee or floor price , and 1 % fluctuates with the price of oil . in the long-term , our success in this portion of the co 2 business segment is driven by the demand for co 2 . however , short-term changes in the demand for co 2 typically do not have a significant impact on us due to the required minimum sales volumes under many of our contracts . in the co 2 business segment 's oil and gas producing activities , we monitor the amount of capital we expend in relation to the amount of production that we expect to add . in that regard , our production during any period is an important measure . in addition , the revenues we receive from our crude oil , ngl and co 2 sales are affected by the prices we realize from the sale of these products . over the long-term , we will tend to receive prices that are dictated by the demand and overall market price for these products . in the shorter term , however , market prices are likely not indicative of the revenues we will receive due to our risk management , or hedging , program , in which the prices to be realized for certain of our future sales quantities are fixed , capped or bracketed through the use of financial derivative contracts , particularly for crude oil . the realized weighted average crude oil price per barrel , with all hedges allocated to oil , was $ 73.11 per barrel in 2015 , $ 88.41 per barrel in 2014 , and $ 92.70 per barrel in 2013. had we not used energy derivative contracts to transfer commodity price risk , our crude oil sales prices would have averaged $ 47.56 per barrel in 2015 , $ 86.48 per barrel in 2014 , and $ 94.94 per barrel in 2013. the factors impacting our terminals business segment generally differ depending on whether the terminal is a liquids or bulk terminal , and in the case of a bulk terminal , the type of product being handled or stored . our liquids terminals business generally has longer-term contracts that require the customer to pay regardless of whether they use the capacity . thus , similar to our natural gas pipeline business , our liquids terminals business is less sensitive to short-term changes in supply and demand . story_separator_special_tag our pension and other postretirement benefit obligations and net benefit costs are primarily based on actuarial calculations . we use various assumptions in performing these calculations , including those related to the return that we expect to earn on our plan assets , the rate at which we expect the compensation of our employees to increase over the plan term , the estimated cost of health care when benefits are provided under our plan and other factors . a significant assumption we utilize is the discount rate used in calculating our benefit obligations . for 2015 , we selected our discount rates by matching the timing and amount of our expected future benefit payments for our pension and other postretirement benefit obligations to the average yields of various high-quality bonds with corresponding maturities . the selection of these assumptions is further discussed in note 10 “ share-based compensation and employee benefits ” to our consolidated financial statements . effective january 1 , 2016 , we changed our estimate of the service and interest cost components of net periodic benefit cost ( credit ) for our pension and other postretirement benefit plans . the new estimate utilizes a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to their underlying projected cash flows . the new estimate provides a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows and their corresponding spot rates . the change does not affect the measurement of our pension and postretirement benefit obligations and it is accounted for as a change in accounting estimate , which is applied prospectively . the change in the service and interest costs going forward will not be significant . actual results may differ from the assumptions included in these calculations , and as a result , our estimates associated with our pension and other postretirement benefits can be , and often are , revised in the future . the income statement impact of the changes in the assumptions on our related benefit obligations are deferred and amortized into income over either the period of expected future service of active participants , or over the expected future lives of inactive plan participants . as of december 31 , 2015 , we had deferred net losses of approximately $ 535 million in pretax accumulated other comprehensive loss and noncontrolling interests related to our pension and other postretirement benefits . 44 the following table shows the impact of a 1 % change in the primary assumptions used in our actuarial calculations associated with our pension and other postretirement benefits for the year ended december 31 , 2015 : replace_table_token_11_th _ ( a ) includes amounts deferred as either accumulated other comprehensive income ( loss ) or as a regulatory asset or liability for certain of our regulated operations . income taxes we record a valuation allowance to reduce our deferred tax assets to an amount that is more likely than not to be realized . while we have considered estimated future taxable income and prudent and feasible tax planning strategies in determining the amount of our valuation allowance , any change in the amount that we expect to ultimately realize will be included in income in the period in which such a determination is reached . in addition , we do business in a number of states with differing laws concerning how income subject to each state 's tax structure is measured and at what effective rate such income is taxed . therefore , we must make estimates of how our income will be apportioned among the various states in order to arrive at an overall effective tax rate . changes in our effective rate , including any effect on previously recorded deferred taxes , are recorded in the period in which the need for such change is identified . in determining the deferred income tax asset and liability balances attributable to our investments , we have applied an accounting policy that looks through our investments . the application of this policy resulted in no deferred income taxes being provided on the difference between the book and tax basis on the non-tax-deductible goodwill portion of our investments . results of operations non-gaap measures the non-gaap financial measures , dcf before certain items and segment ebda before certain items are presented below under “ —distributable cash flow ” and “ —consolidated earnings results , ” respectively . certain items are items that are required by gaap to be reflected in net income , but typically either do not have a cash impact , or by their nature are separately identifiable from our normal business operations and , in our view , are likely to occur only sporadically . our non-gaap measures described below should not be considered as an alternative to gaap net income or any other gaap measure . dcf before certain items and segment ebda before certain items are not financial measures in accordance with gaap and have important limitations as analytical tools . you should not consider either of these non-gaap measures in isolation or as substitutes for an analysis of our results as reported under gaap . because dcf before certain items excludes some but not all items that affect net income and because dcf measures are defined differently by different companies in our industry , our dcf before certain items may not be comparable to dcf measures of other companies . our computation of segment ebda before certain items has similar limitations . management compensates for the limitations of these non-gaap measures by reviewing our comparable gaap measures , understanding the differences between the measures and taking this information into account in its analysis and its decision making processes . 45 distributable cash flow dcf before certain items is an overall performance metric we use to estimate the ability of our assets
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows operating activities the net increase of $ 836 million ( 19 % ) in cash provided by operating activities in 2015 compared to 2014 was primarily attributable to : a $ 726 million increase in cash associated with net changes in working capital items and non-current assets and liabilities . the increase was driven , among other things , primarily by $ 347 million of federal and state income tax refunds we received in 2015 of which $ 195 million was previously reported as an income tax receivable as of december 31 , 2014 , and higher cash flows due to favorable changes in the collection of trade and exchange gas receivables . these increases were offset by lower cash flow due to the timing of payments from our trade payables ; a $ 243 million increase in cash due to the higher payments in 2014 for rate case reserve payments primarily driven by the 2014 cpuc settlement and refund payments ; and a $ 133 million decrease in cash from overall net income after adjusting our period-to-period $ 2,235 million decrease in net income for non-cash items primarily consisting of the following : ( i ) loss on impairment of goodwill ( see discussion above in “ —results of operations ” ) ; ( ii ) net losses on impairments and disposals of long-lived assets and equity investments ( see discussion above in “ —results of operations ” ) ; ( iii ) dd & a expenses ( including amortization of excess cost of equity investments ) ; ( iv ) deferred income taxes ; ( v ) a net increase in legal reserves ( see discussion above in “ —results of operations ” ) ; ( vi ) an increase in net unrealized gains relating to derivative contracts used to hedge forecasted natural gas , ngl , and crude oil sales ( see discussion above in “ —results of operations ” ) ; and ( vii ) an increase in equity earnings from our equity investments .
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domestic same store sales have increased for 15 consecutive years beginning in 2004 , which includes 5-year cumulative domestic same stores sales growth of 32.7 % since fiscal 2014 . we anticipate further increases in domestic same store sales through improvements in brand awareness from national advertising , flavor innovation , increases in digital expansion , and the rollout of delivery . we believe our asset-light , highly-franchised business model generates strong operating margins and requires low capital expenditures , creating shareholder value through strong and consistent free cash flow and capital-efficient growth . highlights for fiscal year 2018 : system-wide restaurant count increased 10.5 % over the prior year to a total of 1,252 worldwide locations , driven by 119 net unit openings ; domestic same store sales increased 6.5 % over the prior year ; company-owned restaurant same store sales increased 6.2 % over the prior year ; system-wide sales increased 16.0 % over the prior year to $ 1.3 billion ; total revenue increased 14.9 % over the prior year to $ 153.2 million ; and net income decreased 9.3 % over the prior year to $ 21.7 million , while adjusted ebitda increased 25.3 % over the prior year to $ 49.0 million ; 40 in fiscal year 2018 we paid quarterly dividends of $ 0.32 per share of common stock and special dividends of $ 6.22 per share of common stock , for a combined $ 6.54 per share of common stock . key performance indicators key measures that we use in evaluating our restaurants and assessing our business include the following : number of restaurants . management reviews the number of new restaurants , the number of closed restaurants , and the number of acquisitions and divestitures of restaurants to assess net new restaurant growth , system-wide sales , royalty and franchise fee revenue and company-owned restaurant sales . replace_table_token_10_th system-wide sales . system-wide sales represents net sales for all of our company-owned and franchised restaurants . this measure allows management to better assess changes in our royalty revenue , our overall store performance , the health of our brand and the strength of our market position relative to competitors . our system-wide sales growth is driven by new restaurant openings as well as increases in same store sales . average unit volume ( auv ) . auv consists of the average annual sales of all restaurants that have been open for a trailing 52-week period or longer . auv allows management to assess our company-owned and franchised restaurant economics . our auv growth is primarily driven by increases in same store sales and is also influenced by opening new restaurants . same store sales . same store sales reflects the change in year-over-year sales for the same store base . we define the same store base to include those restaurants open for at least 52 full weeks . this measure highlights the performance of existing restaurants , while excluding the impact of new restaurant openings and closures . we review same store sales for company-owned restaurants as well as system-wide restaurants . same store sales growth is driven by increases in transactions and average transaction size . transaction size increases are driven by price increases or favorable mix shift from either an increase in items purchased or shifts into higher priced items . 41 adjusted ebitda . we define adjusted ebitda as net income before interest expense , net , income tax expense , and depreciation and amortization , with further adjustments for management fees and expense reimbursement , a management agreement termination fee , transaction costs , gains and losses on the disposal of assets , and stock-based compensation expense . adjusted ebitda may not be comparable to other similarly titled captions of other companies due to differences in methods of calculation . for a reconciliation of adjusted ebitda to net income and a further discussion of how we utilize this non-gaap financial measure , see “ selected historical consolidated financial and other data . ” the following table sets forth our key performance indicators for the fiscal years ended december 29 , 2018 , december 30 , 2017 and december 31 , 2016 ( in thousands , except unit data ) : replace_table_token_11_th key financial definitions revenue . our revenue is comprised of the collection of development fees , franchise fees , royalties , other fees associated with franchise and development rights , national advertising fund contributions and sales of wings and other food and beverage products by our company-owned restaurants . the following is a brief description of our components of revenue : royalty revenue and franchise fees includes revenue we earn from our franchise business segment in the form of royalties , fees , and vendor contributions and rebates . royalties consist primarily of fees earned from franchisees equal to a percentage of gross franchise restaurant sales of all restaurants developed under the applicable franchise agreement . the majority of our franchise agreements require our franchise owners to pay us a royalty of 5.0 % of their gross sales net of discounts . franchise agreements entered into on or after july 1 , 2014 require our franchisees to pay us a royalty of 6.0 % of their gross sales net of discounts . franchise fees consist of initial development and franchise fees related to new restaurants , master license fees for international territories , fees to renew or extend franchise agreements and transfer fees . initial and renewal franchise fees are recognized as revenue on a straight-line basis over the term of the respective agreement . our performance obligation under development agreements and international territory agreements generally consists of an obligation to grant exclusive development rights over a stated term . story_separator_special_tag income tax expense was $ 4.8 million in fiscal year 2017 , yielding an effective tax rate of 16.7 % , compared to an effective tax rate of 37.3 % in the prior fiscal year . the income tax provision for fiscal year 2017 included a benefit of approximately $ 3.6 million , primarily associated with the revaluation of deferred tax liabilities as a result of the enactment of the tax cuts and jobs act on december 22 , 2017 , which reduced the federal corporate income tax rate from 35 % to 21 % effective january 1 , 2018. additionally , tax benefits of $ 2.5 million were realized in fiscal year 2017 resulting from the recognition of excess tax benefits from share-based compensation . 48 segment results . the following table sets forth our revenue and operating profit for each of our segments for the period presented ( in thousands ) : replace_table_token_18_th franchise segment . franchise segment revenue was $ 96.3 million in fiscal year 2017 , an increase of $ 27.2 million , or 39.4 % , from $ 69.0 million in the prior fiscal year . advertising revenue increased $ 15.6 million due to an increase in the advertising fund contribution rate and an increase in system-wide sales . royalty revenue increased $ 6.4 million primarily due to 147 franchise restaurant openings and domestic same store sales growth of 2.6 % during the current fiscal year , partially offset by revenue of approximately $ 0.9 million related to the 53rd week of 2016. other revenue increased $ 4.8 million primarily due to an increase in vendor rebates , including a one-time payment , based on system-wide volumes purchased in the prior year , received under a new vendor agreement executed during the first quarter of 2017. franchise segment profit was $ 29.2 million in fiscal year 2017 , an increase of $ 6.0 million , or 25.7 % , from $ 23.3 million in the prior fiscal year due to the growth in revenue . company segment . company-owned restaurant sales were $ 37.1 million in fiscal year 2017 , an increase of $ 2.8 million , or 8.1 % , compared to $ 34.3 million in the prior fiscal year . the increase is primarily due to the opening of two company-owned restaurants during the third quarter of 2017 and company-owned domestic same store sales growth of 1.6 % , driven by an increase in transactions , partially offset by revenue of approximately $ 0.6 million related to the 53rd week of 2016. company segment profit was $ 4.6 million in fiscal year 2017 , a decrease of $ 0.9 million , or 16.0 % , compared to $ 5.5 million in the prior fiscal year . the decrease is primarily due to an 18.0 % increase in the cost of bone-in chicken wings and investments in roster sizes and staffing to support the continued sales growth in our company-owned restaurants . the decrease is partially offset by the company-owned comparable same store sales increase of 1.6 % , as well as a decrease in repairs and maintenance and pre-opening expenses . story_separator_special_tag style= `` font-family : inherit ; font-size:10pt ; font-style : italic ; font-weight : bold ; `` > contractual obligations the following table sets forth our contractual obligations and commercial commitments as of december 29 , 2018 ( in thousands ) : replace_table_token_20_th ( a ) includes base lease terms and certain optional renewal periods that are included in the lease term in accordance with accounting guidance related to leases . indemnifications . we are parties to certain indemnifications to third parties in the ordinary course of business . the probability of incurring an actual liability under such indemnifications is sufficiently remote so that no liability has been recorded . off-balance sheet arrangements the company is required to provide standby letters of credit related to our securitized financing facility . although the letters of credit are off-balance sheet , the obligations to which they relate are reflected as liabilities in the consolidated balance sheet . outstanding letters of credit totaled $ 5.0 million at december 29 , 2018 . critical accounting policies and estimates our consolidated financial statements and accompanying notes are prepared in accordance with gaap . preparing consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets , liabilities , revenues and expenses . these estimates and assumptions are affected by the application of our accounting policies . critical accounting estimates are those that require application of management 's most difficult , subjective or complex judgments , often as a result of matters that are inherently uncertain and may change in subsequent periods . while we apply our judgment based on assumptions believed to be reasonable under the circumstances , actual results could vary from these assumptions . it is possible that materially different amounts would be reported using different assumptions . our critical accounting policies and estimates are more fully described in note 1 to our consolidated financial statements . however , we believe the accounting policies described below are particularly important to the portrayal and understanding of our financial position and results of operations . 51 revenue recognition revenue from contracts with customers consist primarily of royalties , advertising fund contributions , initial and renewal franchise fees and upfront fees from development agreements and international territory agreements . our performance obligations under franchise agreements consist of ( a ) a franchise license , ( b ) pre-opening services , such as training , and ( c ) ongoing services , such as management of the ad fund , development of training materials and menu items and restaurant monitoring . these performance obligations are highly interrelated so we do not consider them to be individually distinct and therefore account for them under asc 606 as a single performance obligation , which is satisfied by providing a right to use our intellectual
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources general . our primary sources of liquidity and capital resources are cash provided from operating activities , cash and cash equivalents on hand , and proceeds from the incurrence of debt . our primary requirements for liquidity and capital are working capital and general corporate needs . historically , we have operated with minimal positive working capital or with negative working capital . we believe that our sources of liquidity and capital will be sufficient to finance our continued operations and growth strategy for at least the next 12 months . 49 the following table shows summary cash flows information for the fiscal years 2018 , 2017 and 2016 ( in thousands ) : replace_table_token_19_th operating activities . our cash flows from operating activities are driven by sales at both franchise restaurants and company-owned restaurants , as well as franchise and development fees . we collect franchise royalties from our franchise owners on a weekly basis . restaurant-level operating costs at our company-owned restaurants , unearned franchise and development fees and corporate overhead costs also impact our cash flows from operating activities . net cash provided by operating activities was $ 38.8 million in fiscal year 2018 , an increase of $ 11.3 million , from $ 27.4 million in fiscal year 2017 . the increase was primarily due to the timing of changes in working capital . net cash provided by operating activities was $ 27.4 million in fiscal year 2017 , an increase of $ 5.6 million , from $ 21.9 million in fiscal year 2016 primarily due to increased net income over the prior year , and the timing of changes in working capital . investing activities . our net cash used in investing activities was $ 10.5 million in fiscal year 2018 , an increase of $ 4.0 million , from $ 6.5 million in fiscal year 2017 . the increase was due to cash paid for the acquisition of six restaurants from a franchisees during 2018 , as well as an increase in capital expenditures over the prior year .
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for our fiscal year ending june 30 , 2020 , we have the following objectives to advance our development strategy : ( i ) initiate the phase 2b clinical study for rz358 in the us and or europe , ( ii ) complete the necessary toxicology studies for rz402 to enable the filing of an ind and the initiation of clinical studies thereafter , and ( iii ) complete the phase 1 study for ab101 and explore partnership opportunities reference is made to note 13 to our consolidated financial statements included in item 8 of this annual report for further discussion of our financing activities completed in july and august 2019 , approval of our 2019 stock plan , grants of stock options for approximately 34.0 million shares of common stock and , subject to stockholder approval , our ability to complete a reverse stock split and set the exchange ratio between 20 and 100 shares of our common stock into one issued and outstanding share of common stock . 17 factors impacting our results operations we have not generated any revenues since our inception in march 2010. since inception , we have engaged in organizational activities , conducted private placements to raise additional capital , built out a manufacturing suite and produced material for our lead product candidate under good laboratory practices ( “ glp ” ) , conducted studies using the glp material , subsequently changed our strategy to a licensing model that resulted in disposal of our manufacturing assets , and conducted other research and development activities on our pipeline product candidates . due to the time required to conduct clinical trials and obtain regulatory approval for any of our product candidates , we anticipate it will be some time before we generate substantial revenues , if ever . we expect to generate operating losses for the foreseeable future ; therefore we expect to continue efforts to raise additional capital to maintain our current operating plans beyond the next year . we can not assure you that we will secure such financing or that it will be adequate for the long-term execution of our business strategy . even if we obtain additional financing , it may be costly and may require us to agree to covenants or other provisions that will favor new investors over our existing stockholders . our stated strategy has been to build a metabolic focused biotechnology company by in-licensing compelling compounds that we believe clearly target different diseases where there is an unmet need . in december 2017 , we completed the latest phase of this strategy by in-licensing rz358 from xoma corporation . rz358 is a fully human monoclonal antibody that is currently in phase 2 clinical development . rz358 is being developed to treat congenital hyperinsulinism , a devastating ultra-orphan pediatric disease . we believe that rz358 complements our two other metabolic pipeline opportunities including : ( i ) our plasma kallikrein inhibitor , rz402 , which is a late stage preclinical program that offers the potential of an oral therapy to treat diabetic macular edema , the leading cause of blindness in adults in the us , and ( ii ) our super-long-acting basal insulin , ab101 , which is currently in phase 1 clinical development to assess the safety and tolerability , pharmacokinetics and pharmacodynamics of ab101 in patients with diabetes mellitus . key components of consolidated statements of operations research and development expenses . research and development expenses consist primarily of in-licensing costs , material manufacturing costs , and clinical trial costs . our research and development expenses also include ( i ) an allocable portion of our cash and stock-based compensation , employee benefits , and consulting costs related to personnel engaged in the design and development of product candidates and other scientific research projects , and ( ii ) an allocable portion of our facilities and overhead costs related to such personnel . general and administrative expenses . general and administrative expenses consist primarily of ( i ) an allocable portion of our cash and stock-based compensation , employee benefits and consulting costs related to personnel engaged in our administrative , finance , accounting , and executive functions , and ( ii ) an allocable portion of our facilities and overhead costs related to such personnel . general and administrative expenses also include travel , legal , auditing , investor relations and other costs primarily related to our status as a public company . impairment of long-lived assets . impairment exists for property and equipment and identifiable intangible assets if the carrying amounts of such assets exceed the estimates of future net undiscounted cash flows expected to be generated by such assets . an impairment charge is recognized for the amount by which the carrying amount of the asset , or asset group , exceeds its estimated fair value . gain ( loss ) on sale of property and equipment . we recognize a loss on sales of property and equipment when the sale proceeds are less than the net carrying value of the assets sold . gains are recognized if the sale proceeds exceed the net carrying value of the assets sold . any transactions that result in gains are netted against transactions that result in losses for presentation in our consolidated financial statements . interest expense . the components of interest expense include the amount of interest payable in cash at the stated interest rate , beneficial conversion features that arise from the terms of debt arrangements , and accretion of debt discounts and issuance costs ( “ ddic ” ) using the effective interest method . ddic arises from the issuance of debt instruments at a discount to the original principal balance , the fair value of warrants issued in connection with a debt instrument , and incremental and direct costs incurred to consummate the financing . 18 loss on extinguishment of debt . story_separator_special_tag accordingly , all shares of series aa preferred stock held by h & g and the holders of the former fiscal 2018 notes converted to approximately 148.5 million shares of common stock effective april 24 , 2019. a condition to closing the series aa financing was the resignation of a majority of our former directors and the appointment two representatives from h & g as directors whereby h & g appointed two of the three current members of our board of directors . as of june 30 , 2019 , h & g owned an aggregate of approximately 54 % of our common stock which resulted in a change of control . 24 july and august 2019 financings in connection with the series aa offering completed with h & g in january 2019 , we granted a call option to provide additional financing whereby h & g was entitled to elect to purchase up to $ 20.0 million of our common stock at a purchase price equal to the greater of ( i ) $ 0.29 per share or ( ii ) 75 % of the volume weighted average closing price ( “ vwap ” ) of the our common stock during the thirty consecutive trading days prior to the date of the notice . in june 2019 , we entered into a financial advisory agreement to undertake a private placement of ( i ) the shares of common stock issuable under the call option issued to h & g for a total of $ 20.0 million , plus ( ii ) between approximately $ 20 million and $ 30 million of equity or equity equivalent securities to be issued to other investors . on july 23 , 2019 , we entered into a purchase agreement whereby h & g exercised their call option to purchase an aggregate of approximately 69.0 million shares of common stock for gross cash proceeds of $ 20.0 million . since vwap for the previous thirty consecutive trading days was $ 0.20 per share , h & g exercised the call option at a purchase price of $ 0.29 per share . pursuant to the financial advisory agreement entered into in june 2019 , we issued approximately 14.0 million shares of common stock in july and august 2019 to other investors in a private placement . these shares were issued at a purchase price of $ 0.29 per share and resulted in gross proceeds of approximately $ 4.0 million . total advisory fees related to h & g and other private placement issuances amounted to approximately $ 1.4 million , whereby net proceeds from all of the financings amounted to approximately $ 22.6 million . xoma license agreement in january 2019 , we entered into an amendment of our license agreement entered into in december 2017 with xoma . this amendment eliminated the previous requirement that equity securities would be issued to xoma upon the closing of a qualified financing . as a result of the amendment , we agreed to pay xoma approximately $ 5.9 million in cash upon the closing of the series aa financing , which consisted of ( i ) a financing delay fee and other costs incurred through december 2018 of $ 0.4 million , and ( ii ) $ 5.5 million of additional consideration for the license . in february 2019 , we satisfied this payment obligation to xoma for $ 5.9 million . additionally , we agreed to make five future cash payments to xoma totaling $ 8.5 million . this $ 8.5 million liability is payable for $ 1.5 million by september 30 , 2019 , $ 1.0 million by december 31 , 2019 , $ 2.0 million by march 31 , 2020 , $ 2.0 million by june 30 , 2020 , and $ 2.0 million by september 30 , 2020. until the $ 8.5 million liability is fully paid , we are required to make “ early payments ” to xoma equal to 15 % of the net proceeds of any future financings ; any such early payments are applied against the remaining unpaid liability in the reverse order of their future payment date . the completion of the july and august 2019 financings discussed above resulted in the obligation to make early payments to xoma of approximately $ 3.4 million . the early payments were paid in august 2019 and eliminated the requirement to make future cash payments that would have otherwise been due on september 30 , 2020 for $ 2.0 million and on june 30 , 2020 for approximately $ 1.4 million . activesite license agreement in august 2017 , we entered into a development and license agreement with activesite pharmaceuticals , inc. ( “ activesite ” ) pursuant to which we acquired the rights to activesite 's plasma kallikrein inhibitor program ( “ pki program ” ) . we are planning to use the pki program to develop , file , manufacture , market and sell products for diabetic macular edema and other human therapeutic indications . the activesite license agreement requires various milestone payments ranging from $ 1.0 million to $ 10.0 million when milestone events occur , up to an aggregate of $ 36.0 million of aggregate milestone payments . the first milestone payment for $ 1.0 million would be due after completion of the preclinical work and submission of an ind application to the fda for ab101 , which we are attempting to complete during the first half of calendar year 2020. we will also be required to pay royalties equal to 2.0 % of any sales of products that use the pki program , up to a maximum of $ 10.0 million in total royalty payments . through june 30 , 2019 , no milestone payments and royalties have been incurred . planned use of proceeds as a result of the equity financings completed in july and august 2019 , we believe our existing cash balance of
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources , we intend to use the proceeds from our recently completed financings to advance our clinical programs and fulfill our development obligations under the amended license agreement with xoma our milestone payments under the activesite license agreement entered into in august 2017. accordingly , we expect to increase our r & d spending over the next 12 months . general and administrative expenses general and administrative ( “ g & a ” ) expenses decreased from approximately $ 9.1 million for the fiscal year ended june 30 , 2018 to $ 6.8 million for the fiscal year ended june 30 , 2019 , a decrease of $ 2.3 million . this decrease was attributable to a decrease in compensation and benefits for our administrative and executive workforce of $ 2.4 million . this decrease was primarily driven by ( i ) a $ 2.0 million decrease in stock-based compensation expense , and ( ii ) attrition in our g & a workforce that resulted in a decrease of $ 0.6 million . these decreases in compensation and benefits were partially offset by an increase in executive bonuses of $ 0.2 million . the net decrease in compensation and benefits of $ 2.4 million was partially offset by an increase in investor relations expenses of $ 0.2 million . impairment of long-lived assets we review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable . in april 2018 , we made a strategic shift to implement a restructuring plan that included discontinuance of our manufacturing activities at our former leased facilities in colorado . this change in strategy was designed to reduce costs and enable us to focus on finding a partner for continued development of ab101 and developing rz358 with external manufacturing organizations .
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while we expect no revenue in 2014 for the transitioned 3pl business , we do expect to continue to supply product to this customer 's other programs and supply proprietary ventev ® products to at & t retail stores . due to the loss of this 3pl relationship , which generated $ 213.5 million in revenues during fiscal 2013 , we do expect to have a significant decline in overall revenues in fiscal 2014. the wireless communications distribution industry is competitive and fragmented , and is comprised of several national distributors . in addition , many manufacturers sell direct . barriers to entry for distributors are relatively low , particularly in the mobile devices and accessory market , and the risk of new competitors entering the market is high . consolidation of larger wireless carriers has and will most likely continue to impact our current and potential customer base . in addition , the agreements or arrangements with our customers or vendors looking to us for product and supply chain solutions are typically of limited duration and are terminable by either party upon several months or otherwise short notice . our ability to maintain these relationships is subject to competitive pressures and challenges . we believe , however , that our strength in service , the breadth and depth of our product offering , our information technology system , our large customer base and our purchasing relationships with approximately 375 manufacturers provide us with a significant competitive advantage over new entrants to the market . results of operations -27- results of operations the following tables summarize the results of our operations for fiscal years 2013 , 2012 and 2011 : replace_table_token_4_th -28- fiscal year 2013 compared to fiscal year 2012 revenues . revenues for fiscal year 2013 increased 2.6 % as compared to fiscal year 2012 , due to a 13.0 % increase in commercial segment revenues partially offset by a 5.8 % decrease in retail segment revenues . the increase in commercial segment revenues was due to a significant increase in our public carrier , contractor and program manager market , a smaller increase in our commercial dealers and resellers market , and was partially offset by a decline in sales to our private and government system operators market . the retail reduction in sales was a result of a 15.0 % decrease in sales to our major 3pl relationship , at & t , partially offset by 9.2 % sales growth in our retailers , independent dealer agents and carriers market . as noted above , in april 2012 , we were notified by at & t of their intention to transition their 3pl retail store supply chain business , which made up the vast majority of the company 's historical at & t revenues , away from tessco beginning in the second quarter of our fiscal 2013. this transition was completed by the close of our fiscal 2013. gross profit . gross profit decreased 1.1 % in fiscal year 2013 compared to fiscal year 2012 , due to a 15.6 % decrease in our retail segment partially offset by an 8.8 % increase in our commercial segment . within the retail segment , our major 3pl relationship market showed a decrease in sales , with a larger decrease of 44.2 % in gross profit due to the transition of the at & t third party logistics retail supply chain business . this decrease in gross profit was partially offset by a 7.4 % increase in the retailers , independent dealer agents and carriers market . the increase in our commercial segment was driven by increases in our public carrier , contractor and program manager market and our commercial dealers and resellers , and was partially offset by a decline from our private and government system operators market . overall gross profit margin decreased to 19.5 % , compared to 20.3 % in fiscal year 2012 , primarily driven by the continued decline in at & t gross margin . excluding our major 3pl relationship , gross profit margin decreased from 25.4 % in fiscal year 2012 to 24.5 % in fiscal year 2013 , due in part to higher dollar , lower margin public carrier , contractor and program manager market sales . we account for inventory at the lower of cost or market , and as a result , write-offs/write-downs occur due to damage , deterioration , obsolescence , changes in prices and other causes . our ongoing ability to earn revenues and gross profits from customers and vendors looking to us for product and supply chain solutions is dependent upon a number of factors . the terms , and accordingly the factors , applicable to each relationship often differ . among these factors are the strength of the customer 's or vendor 's business , the supply and demand for the product or service , including price stability , changing customer or vendor requirements , and our ability to support the customer or vendor and to continually demonstrate that we can improve the way they do business . in addition , the agreements or arrangements on which our customer and vendor relationships are based are typically of limited duration , typically do not include any obligation in respect of any specific product purchase or sale and are terminable by either party upon several months or otherwise short notice . our customer relationships could also be affected by wireless carrier consolidation or the global financial crisis . selling , general and administrative expenses . story_separator_special_tag as of march 31 , 2013 we had a zero balance outstanding on our $ 35.0 million revolving credit facility ; therefore , we had $ 35.0 million available on our revolving line of credit facility , subject to the limitations imposed by the borrowing base and our continued compliance with the other applicable terms , including the covenants discussed above . on december 30 , 2011 , we entered into a sixth modification agreement with suntrust bank and wachovia bank , national association which provided for certain modifications to the provisions applicable to the credit facility , including extending the term from may 30 , 2012 to may 31 , 2013. this term was further extended to may 31 , 2014 by the eighth modification agreement dated december 21 , 2012. on november 30 , 2012 , we entered in to a seventh modification agreement to allow for the special dividend discussed above . the terms of this revolving credit facility , as amended , allow us to repurchase up to $ 30.0 million of our common stock ( measured forward to the present date from the date of inception of the credit agreement , may 31 , 2007 ) and allow for the payment of up to $ 6.25 million of dividends in any 12 month period , not including the special one-time dividend of $ 6.04 million paid in december 2012. as of march 31 , 2013 , we had repurchased an aggregate of $ 13.7 million of common stock since may 31 , 2007 , leaving $ 16.3 million available for future repurchases , without the consent of our lenders or a further amendment to the terms of the facility . pursuant to the relevant documents , the financial covenants included in the credit agreement for the unsecured revolving credit facility are also applicable to our existing term loan with the same lenders . accordingly , the amendments to the credit agreement also have the effect of amending the financial covenants applicable to the term loan . on march 31 , 2009 , we entered into a term loan with the baltimore county economic development revolving loan fund for an aggregate principal amount of $ 250,000. the term loan is payable in equal monthly installments of principal and interest of $ 2,300 , with the balance due at maturity on april 1 , 2019. the term loan bears interest at 2.00 % per annum and is secured by a subordinate position on our hunt valley , maryland facility . at march 31 , 2013 , the principal balance of this term loan was approximately $ 158,000. working capital ( current assets less current liabilities ) increased to $ 76.6 million as of march 31 , 2013 , from $ 65.8 million as of april 1 , 2012 , primarily due to a decrease in accounts payable partially offset by a decrease in accounts receivable , which is primarily due to the at & t transition . additionally , inventory increased to improve service levels and support increased demand . shareholders ' equity increased to $ 102.8 million as of march 31 , 2013 , from $ 93.7 million as of april 1 , 2012 , primarily due to increased retained earnings due to fiscal year 2013 net income , partially offset by cash dividends paid and net increases in additional paid-in-capital . -34- we believe that our existing cash , payments from customers , and availability under our revolving line of credit facility will be sufficient to support our operations for at least the next twelve months . to minimize interest expense , our policy is to use excess available cash to pay down any balance on our revolving line of credit facility . we expect to meet short-term and long-term liquidity needs through operating cash flow , supplemented by our revolving credit facility . in doing so , the balance on our revolving credit facility could increase depending on our working capital and other cash needs . if we were to undertake an acquisition or other major capital purchases that require funds in excess of its existing sources of liquidity , we would look to sources of funding from additional credit facilities , debt and or equity issuances . there can be no assurances that such additional future sources of funding would be available on terms acceptable to us , if at all . as of march 31 , 2013 , we do not have any material capital expenditure commitments . in addition , our liquidity could be negatively impacted by decreasing revenues and profits resulting from a decrease in demand for our products or a reduction in capital expenditures by our customers , or by the weakened financial conditions of our customers or suppliers , in each case as a result of the downturn in the global economy , among other factors . contractual obligations the following tables reflect a summary of our contractual cash obligations and other commercial commitments as of march 31 , 2013 : replace_table_token_6_th ( 1 ) interest payments include amounts owed on notes payable at their stated contractual rate , as well as interest payments on our note with a bank at a variable rate of libor plus 2.00 % . ( 2 ) other long-term liabilities reflected on the consolidated balance sheet include amounts owed under a supplemental executive retirement plan . ( 3 ) we are unable to make a reasonably reliable estimate of the period of the cash settlement with the respective taxing authorities for the $ 0.7 million balance of our tax contingency reserves , net of federal tax benefits . see further discussion in note 11— `` income taxes `` to the consolidated financial statements set forth elsewhere herein . -35- critical accounting policies and estimates our discussion and analysis of our financial condition and results of our operations are based on our consolidated financial statements , which have been prepared in accordance with
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources in summary , our cash flows were as follows : replace_table_token_5_th -32- we generated $ 3.4 million of net cash from operating activities in fiscal year 2013. our cash inflow from operating activities was driven by net income ( net of depreciation and amortization and non-cash stock compensation expense ) and a decrease in accounts receivable , partially offset by an increase in product inventory and decreases in trade accounts payable and accrued payroll , benefits and taxes . the decrease in accounts receivable is related to the at & t transition . the increase in inventory is intended to improve service levels to support increased customer demand and improve availability . the decrease in trade accounts payable is related to the at & t transition , causing lower at & t inventory purchases and lower accruals related to at & t market development funds , partially offset by higher non-at & t inventory purchases . the decrease in accrued payroll , benefits and taxes was driven by higher bonus accruals in fiscal 2012 ( and their subsequent payouts in fiscal 2013 ) compared to bonus accruals in fiscal 2013. in fiscal year 2012 , our cash inflow from operating activities was driven by net income ( net of depreciation and amortization and non-cash stock compensation expense ) , as well as an increase in trade accounts payable , partially offset by an increase in trade accounts receivables and product inventory . the increase in trade accounts payable was largely due to the timing and credit terms of inventory receipts , including those related to an expansion of our at & t relationship during the third and fourth quarters of fiscal year 2012. the increase in trade accounts receivable was primarily due to the timing of sales and collections , as well as the fact that we have granted extended payment terms to certain large customers . the increased inventory levels were to support growing sales , including the significant increase in sales to at & t during the third and fourth quarters of fiscal year 2012 , and to improve our inventory availability for our other customers .
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tax benefits from the expected utilization of amic 's net operating loss carryforwards expiring in 2020 and 2021. earnings expectations decreased relative to the remaining period that amic 's net operating loss carryforwards are available to offset income and therefore necessitated an increase in the valuation allowance ; consolidated investment yields ( on an annualized basis ) of 3.0 % in both 2019 and 2018 ; and book value of $ 30.92 per common share at december 31 , 2019 compared to $ 30.16 at december 31 , 2018. the following is a summary of key performance information by segment : the specialty health segment reported $ 7.8 million of income before taxes for the year ended december 31 , 2019 compared to $ 28.7 million for the comparable period in 2018. the decrease in 2019 when compared to 2018 is primarily due to lower premium volume in the fixed indemnity limited benefit line , which has lower loss ratios than other lines of business , as well as less favorable prior year loss development in the short-term medical and fixed indemnity limited benefit lines of business . additionally , the 2019 results of this segment include increased costs related to overall infrastructure improvements in lead generation capabilities and sales automation platforms at ihc specialty benefits , inc. , the write-off of an equity method investment and bad debt expense . results for comparable 2018 periods included more favorable development from prior periods mostly on short term medical and fixed indemnity limited benefit business ; 36 o premiums earned decreased 3.5 % or $ 6.5 million for the year ended december 31 , 2019 over the comparable period in 2018. increased premiums from the pet and short-term medical business were more than offset by decreased premiums in fixed indemnity limited benefit business ; o underwriting experience , as indicated by its u.s. gaap combined ratios , for the specialty health segment are as follows for the years indicated ( in thousands ) : replace_table_token_5_th ( a ) loss ratio represents insurance benefits claims and reserves divided by premiums earned . ( b ) expense ratio represents net commissions , administrative fees , premium taxes and other underwriting expenses divided by premiums earned . ( c ) the combined ratio is equal to the sum of the loss ratio and the expenses ratio . o the higher loss ratios in 2019 were as a result of less favorable prior period development than in 2018. the lower expense ratio in 2019 is primarily due to changes in the mix of products in the specialty health segment . income before taxes from the group disability , life , dbl and pfl segment increased $ 2.9 million in 2019 compared to prior year results primarily due a decrease in dbl claim reserves . the december 2019 and 2018 financial results include benefits for a potential risk adjustment payment of $ 10.7 million and $ 7.0 million , respectively , associated with the company 's pfl product due to estimated amounts that the company has to pay into the new york state adjustment pool as a result of ihc 's experience with pfl being significantly better than that of the industry as a whole . this amount will be trued-up during 2020 when state industry claims experience is made available ; the individual life , annuities and other segment in run-off reported losses before income taxes of $ 1.4 million in 2019 compared with losses of $ 0.4 million in 2018 ; the medical stop-loss segment reported an insignificant amount of income before taxes for the years ended december 31 , 2019 and 2018. amounts recorded for investment income , and benefits , claims and reserves in the medical stop-loss segment represent the activity of the remaining reserves of medical stop-loss business in run-off ; and loss before tax from the corporate segment for the year ended december 31 , 2019 decreased $ 1.6 million over the same period in 2018 primarily due to higher income from equity investments , partially offset by increased expenses due to changes in compensation and related costs . 37 premiums by principal product for the years indicated are as follows ( in thousands ) : replace_table_token_6_th replace_table_token_7_th information pertaining to the company 's business segments is provided in note 18 of notes to consolidated financial statements included in item 8. critical accounting policies the accounting and reporting policies of the company conform to u.s. gaap . the preparation of the consolidated financial statements in conformity with u.s. gaap requires the company 's management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes . actual results could differ from those estimates . a summary of the company 's significant accounting policies and practices is provided in note 1 of the notes to the consolidated financial statements included in item 8 of this report . management has identified the accounting policies described below as those that , due to the judgments , estimates and assumptions inherent in those policies , are critical to an understanding of the company 's consolidated financial statements and this management 's discussion and analysis . insurance premium revenue recognition and policy charges premiums for short-duration medical insurance contracts are intended to cover expected claim costs resulting from insured events that occur during a fixed period of short duration . the company has the ability to not renew the contract or to revise the premium rates at the end of each annual contract period to cover future insured events . insurance premiums from annual health contracts are collected monthly and are recognized as revenue evenly as insurance protection is provided . premiums related to long-term and short-term disability contracts are recognized on a pro rata basis over the applicable contract term . story_separator_special_tag if the company intends to sell a debt security , or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis , the entire difference between the security 's amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to total other-than-temporary impairment losses in the consolidated statement of income . if a decline in fair value of a debt security is judged by management to be other-than-temporary and ; ( i ) the company does not intend to sell the security ; and ( ii ) it is not more likely than not that it will be required to sell the security prior to recovery of the security 's amortized cost , the company assesses whether the present value of the cash flows to be collected from the security is less than its amortized cost basis . to the extent that the present value of the cash flows generated by a debt security is less than the amortized cost basis , a credit loss exists . for any such security , the impairment is bifurcated into ( a ) the amount of the total impairment related to the credit loss , and ( b ) the amount of the total impairment related to all other factors . the amount of the other-than-temporary impairment related to the credit loss is recognized by a charge to total other-than-temporary impairment losses in the consolidated statement of income , establishing a new cost basis for the security . the amount of the other-than-temporary impairment related to all other factors is recognized in other comprehensive income ( loss ) . it is reasonably possible that further declines in estimated fair values of such investments , or changes in assumptions or estimates of anticipated recoveries and or cash flows , may cause further other-than-temporary impairments in the near term , which could be significant . in assessing corporate debt securities for other-than-temporary impairment , the company evaluates the ability of the issuer to meet its debt obligations and the value of the company or specific collateral securing the debt position . for mortgage-backed securities where loan level data is not available , the company uses a cash flow model based on the collateral characteristics . assumptions about loss severity and defaults used in the model are primarily based on actual losses experienced and defaults in the collateral pool . prepayment speeds , both actual and estimated , are also considered . the cash flows generated by the collateral securing these securities are then determined with these default , loss severity and prepayment assumptions . these collateral cash flows are then utilized , along with consideration for the issue 's position in the overall structure , to determine the cash flows associated with the mortgage-backed security held by 43 the company . in addition , the company evaluates other asset-backed securities for other-than-temporary impairment by examining similar characteristics referenced above for mortgage-backed securities . the company evaluates u.s. treasury securities and obligations of u.s. government corporations , u.s. government agencies , and obligations of states and political subdivisions for other-than-temporary impairment by examining the terms and collateral of the security . for the purpose of other-than-temporary impairment evaluations , redeemable preferred stocks are evaluated in a manner similar to debt securities . goodwill and other intangible assets goodwill carrying amounts are evaluated for impairment , at least annually , at the reporting unit level that is equivalent to an operating segment . if the fair value of a reporting unit is less than its carrying amount , further evaluation is required to determine if a write-down of goodwill is required . in determining the fair value of each reporting unit , we used an income approach , applying a discounted cash flow method that included a residual value . based on historical experience , we make assumptions as to : ( i ) expected future performance and future economic conditions , ( ii ) projected operating earnings , ( iii ) projected new and renewal business as well as profit margins on such business , and ( iv ) a discount rate that incorporated an appropriate risk level for the reporting unit . any impairment of goodwill would be charged to expense . no impairment charge for goodwill was required in 2019 or 2018. other intangible assets are amortized to expense over their estimated useful lives and are subject to impairment testing . any impairment of other intangible assets would be charged to expense . no impairment charges for intangible assets were required in 2019 or 2018. deferred income taxes the provision for deferred income taxes is based on the asset and liability method of accounting for income taxes . under this method , deferred income taxes are recognized by applying enacted statutory tax rates to temporary differences between amounts reported in the consolidated financial statements and the tax bases of existing assets and liabilities in the years in which those temporary differences are expected to be recovered or settled . a valuation allowance is recognized for the portion of deferred tax assets that , in management 's judgment , is not likely to be realized . a liability for uncertain tax positions is recorded when it is more likely than not that a tax position will not be sustained upon examination by taxing authorities . the effect on deferred income taxes of a change in tax rates or laws is recognized in income tax expense in the period that includes the enactment date . 44 results of operations results of operations for the year ended december 31 , 2019 compared to the year ended december 31 , 2018 information by business segment for the periods indicated is as follows ( in thousands ) : replace_table_token_10_th replace_table_token_11_th premiums earned in 2019 , premiums earned increased $ 17.5 million over the comparable period of 2018.
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows the company had $ 24.6 million and $ 30.8 million of cash , cash equivalents and restricted cash as of december 31 , 2019 and 2018 , respectively . operating activities provided $ 39.2 million of cash and investment activities utilized $ 27.1 million of cash , primarily the result of purchases of investment securities , $ 8.0 million utilized for business acquisitions and $ 8.0 million in other investments . financing activities utilized $ 18.2 million of cash , of 47 which $ 5.2 million related to common stock dividend payments , $ 4.7 million was utilized to acquire noncontrolling interests in subsidiaries , $ 4.1 million was utilized for treasury share purchases , and $ 2.4 million related to payments for tax withholdings on share-based compensation . at december 31 , 2019 , the company had $ 526.3 million of insurance liabilities that it expects to ultimately pay out of current assets and cash flows from future business . if necessary , the company could utilize the cash received from maturities and repayments of its fixed maturity investments if the timing of claim payments associated with the company 's insurance resources does not coincide with future cash flows . for the year ended december 31 , 2019 , cash received from the maturities and other repayments of fixed maturities was $ 86.5 million . the company believes it has sufficient cash to meet its currently anticipated business requirements over the next twelve months including working capital requirements and capital investments . balance sheet the company had receivables from reinsurers of $ 363.0 million at december 31 , 2019 compared to $ 368.7 million at december 31 , 2018. all of such reinsurance receivables are from highly rated companies or are adequately secured .
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subsequent to december 31 , 2020 , management has determined that the expected useful life of transaction verification servers would be five years . prior to december 31 , 2020 , management depreciated these servers over two years . this assessment takes into consideration the availability of historical data and management 's expectations regarding the direction of the industry including potential changes in technology . management will story_separator_special_tag the following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated . the discussion should be read in conjunction with our consolidated financial statements and the notes presented herein . in addition to historical information , the following management 's discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks and uncertainties . our actual results could differ significantly from those expressed , implied or anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the securities and exchange commission . cautionary note regarding forward-looking statements this report and other documents that we file with the securities and exchange commission contain forward-looking statements that are based on current expectations , estimates , forecasts and projections about our future performance , our business , our beliefs and our management 's assumptions . statements that are not historical facts are forward-looking statements . words such as “ expect , ” “ outlook , ” “ forecast , ” “ would , ” “ could , ” “ should , ” “ project , ” “ intend , ” “ plan , ” “ continue , ” “ sustain ” , “ on track ” , “ believe , ” “ seek , ” “ estimate , ” “ anticipate , ” “ may , ” “ assume , ” and variations of such words and similar expressions are often used to identify such forward-looking statements , which are made pursuant to the safe harbor provisions of the private securities litigation reform act of 1995. these forward- looking statements are not guarantees of future performance and involve risks , assumptions and uncertainties , including , but not limited to , those described in our reports that we file or furnish with the securities and exchange commission . should one or more of these risks or uncertainties materialize , or should underlying assumptions prove incorrect , actual results may vary materially from those indicated or anticipated by such forward-looking statements . accordingly , you are cautioned not to place undue reliance on these forward-looking statements , which speak only as of the date they are made . except to the extent required by law , we undertake no obligation to update publicly any forward-looking statements after the date they are made , whether as a result of new information , future events , changes in assumptions or otherwise . business of the company we were incorporated in the state of nevada on february 23 , 2010 under the name verve ventures , inc. as of the date of this filing , our name has been changed to marathon digital holdings , inc. on december 7 , 2011 , we changed our name to american strategic minerals corporation and were engaged in exploration and potential development of uranium and vanadium minerals business . in june 2012 , we discontinued our minerals business and began to invest in real estate properties in southern california . in october 2012 , we discontinued our real estate business when our former ceo joined the firm and we commenced our ip licensing operations , at which time the company 's name was changed to marathon patent group , inc. on november 1 , 2017 , we entered into a merger agreement with global bit ventures , inc. ( “ gbv ” ) , which is focused on mining digital assets . we have since purchased our cryptocurrency mining machines and established a data center in canada to mine digital assets . following the merger , we intended to add gbv 's existing technical capabilities and digital asset miners and expand our activities in the mining of new digital assets , while at the same time harvesting the value of our remaining ip assets . on june 28 , 2018 , the board has determined that it is in the best interests of the company and its shareholders to allow the amended merger agreement to expire on its current termination date of june 28 , 2018 without further negotiation or extension . the board approved to issue 750,000 shares of our common stock to gbv as a termination fee for canceling the proposed merger between the two companies . the fair value of the common stocks was $ 2,850,000 . 35 recent developments purchase of digital asset mining servers on september 30 , 2019 , the company consummated the purchase of 6000 s-9 bitmain 13.5 th/s bitcoin antminers ( “ miners ” ) from selectgreen blockchain ltd. , a british columbia corporation , for which the purchase price was $ 4,086,250 or 2,335,000 shares of its common stock at a price of $ 1.75 per share . as a result of an exchange cap requirement imposed in conjunction with the company 's listing of additional shares application filed with nasdaq to the transaction , the company issued 1,276,442 shares of its common stock which represented $ 2,233,773 of the $ 4,086,250 ( constituting 19.9 % of the issued and outstanding shares on the date of the asset purchase agreement ) and upon the receipt of shareholder approval , at the annual shareholders meetingto be held on november 15 , 2019 , the company can issue the balance of the 1,058,558 unregistered common stock shares . story_separator_special_tag we incurred other operating expenses of $ 7.2 million for the year ended december 31 , 2020 and $ 2.9 million for the year ended december 31 , 2019. for the year ended december 31 , 2020 , this represented an increase of $ 4.3 million or 144 % . these expenses primarily consisted of the impairment of mining equipment , compensation to our officers , directors and employees , professional fees and consulting incurred in connection with the day-to-day operation of our business and break-up fee to gbv . the operating expenses consisted of the following : replace_table_token_2_th ( 1 ) compensation expense and related taxes : compensation expense includes cash compensation and related payroll taxes and benefits , and non-cash equity compensation expenses . for the year ended december 31 , 2020 and 2019 , compensation expense and related payroll taxes were $ 4.7 million and $ 1.5 million , an increase of $ 3.3 million or 221 % . during the years ended december 31 , 2020 and 2019 , we recognized non-cash employee and board equity-based compensation of $ 1,258,735 and $ 674,182 , respectively . ( 2 ) consulting fees : for the year ended december 31 , 2020 and 2019 , we incurred consulting fees of $ 0.3 million and $ 0.1 million , respectively , an increase of $ 0.2 million or 131 % . consulting fees include consulting fees primarily for investor relations and public relations services as well as other consulting services . the increase in consulting fees for the year ended december 31 , 2020 compared to the same period in the prior year was primarily due to the write-off of prepaid consulting fees from a prior period . ( 3 ) professional fees : for the year ended december 31 , 2020 and 2019 , professional fees were $ 0.7 million and $ 0.4 million , respectively , an increase of $ 0.3 million or 74 % . professional fees primarily reflect the costs of professional outside accounting fees , legal fees and audit fees . the increase in professional fees was mainly the result of legal fees related to the atm financing offerings . 37 ( 4 ) other general and administrative expenses : for the year ended december 31 , 2020 and 2019 , other general and administrative expenses were $ 0.6 million and $ 0.5 million , respectively , an increase of $ 0.1 million or 18 % . general and administrative expenses reflect the other non-categorized operating costs of the company and include expenses related to being a public company , rent , insurance , technology and other expenses incurred to support the operations of the company . ( 5 ) impairment of mining equipment : for the years ended december 31 , 2020 , the company recorded a loss on the impairment of mining equipment in the amounts of $ 0.9 million . ( 6 ) impairment of leasehold improvements : for the years ended december 31 , 2019 , the company recorded a loss on the impairment of leasehold improvements in the amounts of $ 0.4 million . operating loss we reported operating loss from continuing operations of $ 9.8 million and $ 4.2 million for the years ended december 31 , 2020 and 2019 , respectively . other expenses total other expenses were $ 0.6 million for the year ended december 31 , 2020 compared to total other income of $ 0.7 million for the year ended december 31 , 2019. the changes are de minimis . net loss available to common shareholders we reported net loss of $ 10.4 million and $ 3.5 million for the year ended december 31 , 2020 and 2019 , respectively . story_separator_special_tag new roman , times , serif ; font-size : 10pt `` > during the month of april 2020 , the company issued 3,016,385 shares of common stock under the at the market offering for the total proceeds of $ 1,514,969 , net of offering cost of $ 58,532. during the month of may 2020 , the company issued 5,987,723 shares of common stock under the at the market offering for the total proceeds of $ 3,607,398 , net of offering cost of $ 127,765. during the month of june 2020 , the company issued 1,540,710 shares of common stock under the at the market offering for the total proceeds of $ 1,537,346 , net of offering cost of $ 51,526. on june 1 , 2020 , the company issued 2,023,739 shares of common stock in exchange for the conversion and extinguishment of the note payable outstanding in an amount of $ 999,106. during the month of august 2020 , the company issued 5,820,761 shares of common stock under the at the market offering for the total proceeds of $ 20,178,935 , net of offering cost of $ 630,283. during the month of september 2020 , the company issued 943,981 shares of common stock under the at the market offering for the total proceeds of $ 2,516,199 , net of offering cost of $ 78,874. during the month of october 2020 , the company issued 7,813,218 shares of common stock under the at the market offering for the total proceeds of $ 21,320,409 , net of offering cost of $ 665,773. on october 6 , 2020 , the company issued 6,000,000 shares of common stock in exchange for five years of services pursuant to the power purchase agreement and data facility services agreement for the total proceeds of $ 0 , net of offering cost of $ 0 valued at the time of execution at $ 1.87 per share or $ 11,220,000 in aggregate . during the month of november 2020 , the company issued 5,851,295 shares of common stock under the at the market offering for the total proceeds of $ 16,685,649 , net of offering cost of $ 519,992. during the month of december 2020 , the company issued 22,924,550 shares of
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources the company 's consolidated financial statements have been prepared assuming that it will continue as a going concern , which contemplates continuity of operations , realization of assets , and liquidation of liabilities in the normal course of business . as reflected in the consolidated financial statements , the company had and accumulated deficit of approximately $ 116.1 million and $ 105.6 million at december 31 , 2020 and december 31 , 2019 , respectively , a net loss of approximately $ 10.4 million and $ 3.5 million , respectively , and approximately $ 7.8 million and $ 3.3 million net cash used in operating activities for the year ended december 31 , 2020 and december 31 , 2019 , respectively . liquidity is the ability of a company to generate funds to support its current and future operations , satisfy its obligations , and otherwise operate on an ongoing basis . at december 31 , 2020 , the company 's cash and cash equivalents balances totaled $ 141.3 million compared to $ 0.7 million at december 31 , 2019. the increase in liquidity is due to the issuance of common stock during 2020 as it relates to the various at the market offerings .
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pursuant to this agreement , the insurance company unconditionally and irrevocably guarantees all future payments to certain participants that were receiving payments from the u.s. pension plan . the insurance company assumes all investment risk associated with the assets that were delivered as part of this transaction . additionally , during 2019 , the company discharged certain u.s. pension plan obligations by making lump-sum payments of $ 15 million to former employees of the company . as a result , the company settled $ 65 million of projected pension obligation by liquidating an equivalent amount of pension plan assets and recorded a non-cash settlement loss of $ 27 million related to the accelerated recognition of unamortized losses . during the year ended december 31 , 2019 , the company recorded $ 14 million of expenses related to the receipt of a final unfavorable arbitration decision associated with the resolution of a matter related to a previous acquisition . 33 during the year ended december 31 , 2019 , the company recorded $ 11 million of expenses , primarily professional fees , related to the company 's strategic acquisition and divestiture activities , including the transfer of morse tec , the anticipated acquisition of delphi technologies , and the 20 % equity interest in romeo systems , inc. and the divestiture activities for the non-core pipes and thermostat product lines . during the year ended december 31 , 2019 , the company recorded an additional loss on sale of $ 7 million to account for the cash proceeds and finalization of the purchase price adjustments related to the sale of the non-core pipes and thermostat product lines . refer to note 20 , `` assets and liabilities held for sale , `` to the consolidated financial statements in item 8 of this report for more information . during the year ended december 31 , 2019 , the company recorded a pre-tax gain on the derecognition of borgwarner morse tec llc ( `` morse tec `` ) of $ 177 million and removed the asbestos obligations and related insurance assets from the consolidated balance sheet . in addition , the company recorded tax expense as a result of the reversal of the previously recorded deferred tax assets related to the asbestos liabilities of $ 173 million , resulting in an after-tax gain of $ 4 million . refer to note 19 , `` recent transactions , `` to the consolidated financial statements in item 8 of this report for more information . the company 's provision for income taxes for the year ended december 31 , 2019 , includes reductions to tax expense of $ 19 million related to restructuring and merger , acquisition and divestiture expense and $ 6 million related to pension settlement loss . this rate also includes increases to tax expense of $ 22 million due to the u.s. department of the treasury 's issuance of the final regulations in the first quarter of 2019 related to the calculation of the one-time transition tax partially offset by reductions to tax expense of $ 11 million for a global realignment plan and $ 8 million related to other one-time adjustments . year ended december 31 , 2018 : the company recorded restructuring expense of $ 67 million related to engine and drivetrain segment actions designed to improve future profitability and competitiveness , primarily related to employee termination benefits , professional fees , and manufacturing footprint rationalization activities . during the year ended december 31 , 2018 , the company recorded an asset impairment expense of $ 26 million to adjust the net book value of the pipes and thermostat product lines to fair value less costs to sell . additionally , the company recorded $ 6 million of merger , acquisition and divestiture expense primarily related to professional fees associated with divestiture activities for the non-core pipes and thermostat product lines . refer to note 20 , `` assets and liabilities held for sale , `` to the consolidated financial statements in item 8 of this report for more information . the company recorded net restricted stock and performance share unit compensation expense of $ 8 million in the year ended december 31 , 2018 as the company modified the vesting provisions of restricted stock and performance share unit grants made to retiring executive officers to allow certain of the outstanding awards , that otherwise would have been forfeited , to vest upon retirement . refer to note 13 , `` stock-based compensation , `` to the consolidated financial statements in item 8 of this report for more information . during the year ended december 31 , 2018 , the company recorded asbestos-related adjustments resulting in an increase to other expense of $ 23 million . this increase was the result of actuarial valuation changes of $ 23 million associated with the company 's estimate of liabilities for asbestos-related claims asserted but not yet resolved and potential claims not yet asserted . refer to note 15 , `` contingencies , `` to the consolidated financial statements in item 8 of this report for more information . during the fourth quarter of 2018 , the company recorded a gain of $ 19 million related to the sale of a building at a manufacturing facility located in europe . 34 during the year ended december 31 , 2018 , the company recorded a gain of approximately $ 4 million related to the settlement of a commercial contract for an entity acquired in the 2015 remy acquisition . story_separator_special_tag customer incentive payments are capitalized when the payments are incremental and incurred only if the new business is obtained and these amounts are expected to be recovered from the customer over the term of the new business arrangement . the company recognizes a reduction to revenue as products that the upfront payments are related to are transferred to the customer , based on the total amount of products expected to be sold over the term of the arrangement ( generally 3 to 7 years ) . the company evaluates the amounts capitalized each period end for recoverability and expenses any amounts that are no longer expected to be recovered over the term of the business arrangement . impairment of long-lived assets , including definite-lived intangible assets the company reviews the carrying value of its long-lived assets , whether held for use or disposal , including other amortizing intangible assets , when events and circumstances warrant such a review under asc topic 360. in assessing long-lived assets for an impairment loss , assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities . in assessing long-lived assets for impairment , management generally considers individual facilities the lowest level for which identifiable cash flows are largely independent . a recoverability review is performed using the undiscounted cash flows if there is a triggering event . if the undiscounted cash flow test for recoverability identifies a possible impairment , management will perform a fair value analysis . management determines fair value under asc topic 820 using the appropriate valuation technique of market , income or cost approach . if the carrying value of a long-lived asset is considered impaired , an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value . management believes that the estimates of future cash flows and fair value assumptions are reasonable ; however , changes in assumptions underlying these estimates could affect the valuations . significant judgments and estimates used by management when evaluating long-lived assets for impairment include : ( i ) an assessment as to whether an adverse event or circumstance has triggered the need for an impairment review ; ( ii ) undiscounted future cash flows generated by the asset ; and ( iii ) fair valuation of the asset . events and conditions that could result in impairment in the value of our long-lived assets include changes in the industries in which we operate , particularly the impact of a downturn in the global economy , as well as competition and advances in technology , adverse changes in the regulatory environment , or other factors leading to reduction in expected long-term sales or profitability . assets and liabilities held for sale the company classifies assets and liabilities ( disposal groups ) to be sold as held for sale in the period in which all of the following criteria are met : management , having the authority to approve the action , commits to a plan to sell the disposal group ; the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups ; an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated ; the sale of the disposal group is probable , and transfer of the disposal group is expected to qualify for recognition as a completed sale within one year , except if events or circumstances beyond the company 's control extend the period of time required to sell the disposal group beyond one year ; the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value ; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn . 43 the company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell . any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met . conversely , gains are not recognized on the sale of a disposal group until the date of sale . the company assesses the fair value of a disposal group , less any costs to sell , each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group , as long as the new carrying value does not exceed the carrying value of the disposal group at the time it was initially classified as held for sale . additionally , depreciation is not recorded during the period in which the long-lived assets , included in the disposal group , are classified as held for sale . upon determining that a disposal group meets the criteria to be classified as held for sale , the company reports the assets and liabilities of the disposal group , if material , in the line items assets held for sale and liabilities held for sale in the consolidated balance sheet . refer to note 20 , `` assets and liabilities held for sale , `` to the consolidated financial statements in item 8 of this report for more information . goodwill and other indefinite-lived intangible assets during the fourth quarter of each year , the company qualitatively assesses its goodwill assigned to each of its reporting units . this qualitative assessment evaluates various events and circumstances , such as macro economic conditions , industry and market conditions , cost factors , relevant events and financial trends , that may impact a reporting unit
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | net cash provided by operating activities was $ 1,008 million and $ 1,126 million in the years ended december 31 , 2019 and 2018 , respectively . the decrease for the year ended december 31 , 2019 compared with the year ended december 31 , 2018 primarily reflected the cash outflow related to the derecognition of a subsidiary , partially offset by changes in working capital . investing activities net cash used in investing activities was $ 489 million and $ 514 million in the years ended december 31 , 2019 and 2018 , respectively . the decrease in the year ended december 31 , 2019 compared with the year ended december 31 , 2018 was primarily due to lower capital expenditures , including tooling outlays in 2019. year-over-year capital spending decrease of $ 65 million during the year ended december 31 , 2019 was primarily due to timing of the investment activity in the engine segment . financing activities net cash used in financing activities was $ 420 million and $ 383 million in the years ended december 31 , 2019 and 2018 , respectively . the increase in the year ended december 31 , 2019 compared with the year ended december 31 , 2018 was primarily driven by higher debt repayments , partially offset by lower share repurchases . 40 the company 's significant contractual obligations at december 31 , 2019 are as follows : replace_table_token_12_th ( a ) other postretirement employee benefits , excluding pensions , include anticipated future payments to cover retiree medical and life insurance benefits . amount contained in “ after 2024 ” column includes estimated payments through 2029. refer to note 12 , `` retirement benefit plans , '' to the consolidated financial statements in item 8 of this report for disclosures related to the company 's other postretirement employee benefits . ( b ) since the timing and amount of payments for funded defined benefit pension plans are usually not certain for future years such potential payments are not shown in this table .
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this information is not an exhaustive list of all of the factors that could affect our results and should be read in conjunction with the factors referred to in the sections entitled “ risk factors ” and “ forward-looking statements ” included elsewhere in this annual report on form 10-k. shift to saas and hosted solutions by airlines and hotels to manage their daily operations initially , large travel suppliers built custom in-house software and applications for their business process needs . in response to a desire for more flexible systems given increasingly complex and constantly changing technological requirements , reduced it budgets and increased focus on cost efficiency , many travel suppliers turned to third party solutions providers for many of their key technologies and began to license software from software providers . we believe that significant revenue opportunity remains in this outsourcing trend , as legacy in-house systems continue to migrate and upgrade to third party systems . by moving away from one time license fees to recurring monthly fees associated with our saas and hosted solutions , our revenue stream has become more predictable and sustainable . the saas and hosted models ' centralized deployment also allows us to save time and money by reducing maintenance and implementation tasks and lowering operating costs . 40 increasing importance of otas to travel network the significance of otas to our travel network business has increased in recent years and as a result , our earnings may be impacted by factors affecting otas . as otas experience growth , we believe they shift bookings away from offline travel agencies and direct channels of travel suppliers . we expect to continue to benefit from this trend as we are a substantial gds provider to the ota industry . however , we may face pricing pressure in the future as otas increase their bargaining power through growth by consolidation . growing demand for continued technology improvements in the fragmented hotel market most of the hotel market is highly fragmented . independent hotels and small to medium sized chains ( groups of less than 300 properties ) comprise a majority of hotel properties and available hotel rooms , with global and regional chains comprising the balance . hotels use a number of different technology systems to distribute and market their products and operate efficiently . we offer technology solutions to all segments of the hospitality market , particularly independent hotels and small to medium sized chains . our synxis enterprise platform integrates critical hospitality systems to optimize distribution , operations , retailing and guest experience via one scalable , flexible and intelligent platform . as these markets continue to grow , we believe independent hotel owners and operators will continue to seek increased connectivity and integrated solutions to ensure access to global travelers . we anticipate that this will contribute to the continued growth of airline and hospitality solutions , which is ultimately dependent upon these hoteliers accepting and utilizing our products and services . geographic mix of travel network there are structural differences between the geographies in which we operate . due to our geographic concentration , our results of operations are particularly sensitive to factors affecting north america . for example , booking fees per transaction in north america have traditionally been lower than those in europe . by growing internationally with our tmc and ota customers and expanding the travel content available on our gds to target regional traveler preferences , we anticipate that we will maintain share in north america and grow share in europe , apac and latin america . for the year ended december 31 , 2015 , we derived approximately 61 % of our direct billable bookings from north america , 18 % from emea and 21 % from the rest of the world . for the year ended december 31 , 2014 , we derived approximately 68 % of our direct billable bookings from north america , 19 % from emea and 13 % from the rest of the world . travel buyers can shift their bookings to or from our travel network business our travel network business relies on relationships with several large travel buyers , including tmcs and otas , to drive a large portion of its revenue . although our contracts with larger travel agencies often increase the amount of the incentive consideration when the travel agency processes a certain volume or percentage of its bookings through our gds , travel buyers are not contractually required to book exclusively through our gds during the contract term . travel buyers may shift bookings to other distribution intermediaries for many reasons , including to avoid becoming overly dependent on a single source of travel content and increase their bargaining power with the gds providers . for example , in late 2012 , expedia adopted a dual gds provider strategy and shifted a sizeable portion of its business from our gds to a competitor gds , resulting in a year over year decline in our transaction volumes in 2013. conversely , certain european otas including unister , etravel , travelplanet24 and bravofly that did not previously use our gds shifted a portion of their business to our gds . increasing importance of lcc/hybrids in travel network and airline and hospitality solutions hybrid and lccs have become a significant segment of the air travel market , stimulating demand for air travel through low fares . lcc/hybrids have traditionally relied on direct distribution for the majority of their bookings . however , as these lcc/hybrids are evolving , many are increasing their distribution through indirect channels to expand their offering into higher yield markets and to higher yield customers , such as business and international travelers . other lcc/hybrids , especially start up carriers , may choose not to distribute through the gds until wider distribution is desired . increasing travel agency incentive consideration travel agency incentive consideration is a large portion of travel network expenses . story_separator_special_tag the increase in revenue primarily resulted from : a $ 26 million increase in transaction-based revenue to $ 1,615 million as a result of an 8 million increase in direct billable bookings , or 2 % , to 376 million for the year ended december 31 , 2014. the increase in bookings was partially offset by a decrease of less than 1 % in the average booking fee primarily due to the impact on our average booking fee from us airways merger with american airlines , the unfavorable political and economic environment in venezuela and the resolution of a billing dispute with us airways . see “ liquidity and capital resources—recent events impacting our liquidity—political and economic environment in venezuela ” for a description of the impact of the environment in venezuela on our business ; and a $ 7 million increase in other revenue including media and marketing services . airline and hospitality solutions —revenue increased $ 75 million , or 10 % , for the year ended december 31 , 2014 compared to the prior year . the increase in revenue primarily resulted from : a $ 36 million increase in airline solutions ' sabresonic revenue for the year ended december 31 , 2014 compared to the prior year . pbs increased 33 million , or 7 % , to 511 million for the year ended december 31 , 2014 which was driven by growth from existing customers and resulted in an increase in revenue of $ 18 million . in addition , we recognized $ 19 million in revenue during the year ended december 31 , 2014 associated with the extension of a services contract with a significant customer . this contract was extended in conjunction with a litigation settlement agreement with that customer in 2012. these increases were partially offset by a decrease in revenue from professional services ; a $ 20 million increase in airline solutions ' commercial and operations solutions ; and a $ 19 million increase in hospitality solutions revenue to $ 132 million for the year ended december 31 , 2014 compared to $ 113 million in the prior year , primarily driven by an increase in crs transactions . cost of revenue replace_table_token_19_th travel network —cost of revenue increased $ 31 million , or 3 % , for the year ended december 31 , 2014 compared to the prior year . the increase primarily resulted from a $ 37 million increase in incentive consideration , partially offset by decreases in labor and other costs . 47 airline and hospitality solutions —cost of revenue decreased $ 1 million , or less than 1 % , for the year ended december 31 , 2014 compared to the prior year . the decrease is primarily the result of a $ 13 million decrease in labor costs , partially offset by a $ 12 million increase in technology and transaction-related expenses driven by higher transaction volumes . corporate —cost of revenue associated with corporate unallocated costs decreased $ 6 million , or 9 % , for the year ended december 31 , 2014 compared to the prior year . the decrease is primarily due to a $ 7 million decrease in unallocated labor costs , a $ 4 million decrease in professional fees and a $ 2 million decrease in data processing costs . these decreases were partially offset by an increase in cost of revenue from a $ 7 million contractual settlement received from a service provider in 2013 which did not reoccur in 2014. depreciation and amortization —cost of revenue associated with depreciation and amortization increased $ 6 million , or 3 % , for the year ended december 31 , 2014 compared to the prior year . the increase is primarily due to the completion and amortization of software developed for internal use , partially offset by a decrease in amortization of intangible assets . amortization of upfront incentive consideration —amortization of upfront incentive consideration increased by $ 9 million , or 24 % , for the year ended december 31 , 2014 compared to the prior year . the increase is primarily due to an increase in upfront consideration provided to travel agencies in the year ended december 31 , 2014 compared to the prior year . selling , general and administrative expenses year ended december 31 , 2014 2013 change ( amounts in thousands ) selling , general and administrative $ 467,594 $ 437,453 $ 30,141 7 % sg & a increased by $ 30 million , or 7 % , for the year ended december 31 , 2014 compared to the prior year . the increase was due to an increase of $ 15 million in management fees paid to tpg and silver lake related to our initial public offering , a $ 10 million increase in professional fees primarily related to the implementation of certain public company requirements and strategic transactions , a $ 9 million increase in labor costs to support the growth of our business and a $ 5 million increase in bad debt expenses . these increases were partially offset by restructuring charges of $ 8 million recorded during the year ended december 31 , 2013 that did not reoccur in the year ended december 31 , 2014 , and lower information technology costs and depreciation and amortization . interest expense , net year ended december 31 , 2014 2013 change ( amounts in thousands ) interest expense , net $ 218,877 $ 274,689 $ ( 55,812 ) ( 20 ) % interest expense , net , decreased $ 56 million , or 20 % , for the year ended december 31 , 2014 compared to the prior year . the decrease is primarily due to the prepayments on our 2019 notes and term loan c ( see “ —senior secured credit facilities ” ) and a lower effective interest rate as a result of our repricing amendments completed in february 2014. in addition ,
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows operating activities cash provided by operating activities for the year ended december 31 , 2015 was $ 529 million and consisted of net income from continuing operations of $ 235 million , adjustments for non-cash and other items of $ 455 million and a decrease in cash from changes in operating assets and liabilities of $ 160 million . the adjustments for non-cash and other items consist primarily of $ 351 million of depreciation and amortization , $ 97 million of deferred taxes , $ 44 million of amortization of upfront incentive consideration , $ 39 million loss on extinguishment of debt , $ 30 million of stock-based compensation and a $ 29 million dividend received from aipl prior to the acquisition ; partially offset by the $ 78 million gain on the remeasurement of our previously-held interest in abacus and $ 61 million of litigation-related credits . the decrease in cash from changes in operating assets and liabilities was primarily the result of a $ 67 million increase in other assets , mainly driven by deferred customer discounts , $ 64 million used for upfront incentive consideration and $ 63 million used for capitalized implementation costs ; partially offset by an increase in accrued compensation and related benefits of $ 18 million and a decrease in accounts and other receivables of $ 11 million .
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22 significant events in 2014 announcement to acquire cameron international corporation 's centrifugal compression division on august 18 , 2014 , the company announced an agreement to acquire the assets of cameron international corporation 's centrifugal compression division ( the division ) for $ 850 million . the acquisition was completed on january 1 , 2015 , and was funded through a combination of cash from operations and debt . the division provides centrifugal compression equipment and aftermarket parts and services for global industrial applications , air separation , gas transmission and process . the assets acquired and the results of its operations will be reflected in our consolidated financial statements beginning in the first quarter of 2015. issuance of senior notes due 2020 , 2024 , and 2044 in october 2014 , we issued $ 1.1 billion principal amount of senior notes in three tranches through a newly-created wholly-owned subsidiary , ingersoll-rand luxembourg finance s.a. ( ir-lux ) . the tranches consist of $ 300 million of 2.625 % senior notes due in 2020 , $ 500 million of 3.55 % senior notes due 2024 , and $ 300 million of 4.65 % senior notes due in 2044. the notes are fully and unconditionally guaranteed by ingersoll-rand plc ( ir-ireland ) and certain of our wholly-owned subsidiaries . the proceeds from the notes were primarily used to ( i ) fund the october 2014 redemption of the $ 200 million of 5.50 % notes due 2015 and $ 300 million 4.75 % senior notes due 2015 , and ( ii ) fund the acquisition of cameron international corporation 's centrifugal compression division on january 1 , 2015. related to the redemption , the company recognized $ 10.2 million of premium expense in interest expense . for additional information regarding the terms of the notes and the related guarantees , see notes 7 and 19 to the consolidated financial statements . 2014 dividend increase and share repurchase activity in february 2015 , we announced an increase in our quarterly dividend from $ 0.25 to $ 0.29 per share beginning with our march 2015 payment . in february 2014 , our board of directors authorized the repurchase of up to $ 1.5 billion of our ordinary shares under a new share repurchase program . the new share repurchase program began in the second quarter of 2014. during 2014 , the company repurchased 23.0 million shares for $ 1.4 billion , of which 9.8 million shares for $ 583.4 million were under the 2014 program . shares repurchased prior to october 2014 were canceled upon repurchase and beginning in october 2014 , repurchased shares were held in treasury and recognized at cost . in december 2012 , our board of directors authorized the repurchase of up to $ 2.0 billion of our ordinary shares under a share repurchase program . the share repurchase program began in april 2013 , and during 2013 , we repurchased 20.8 million shares for $ 1.2 billion , excluding commissions . the remaining $ 0.8 billion of repurchases authorized under this program were made during the first and second quarter of 2014. venezuela currency devaluation in february 2013 , the government of venezuela announced a devaluation of the bolivar , from the pre-existing official exchange rate obtained through the national center of foreign trade ( cencoex , formerly cadivi through april 2014 ) of 4.29 bolivars to the u.s. dollar to 6.3 bolivars to the u.s. dollar . we have one subsidiary with operations in venezuela . due to the designation of venezuela as highly inflationary , the u.s. dollar was determined to be the functional currency for this subsidiary . as a result of the devaluation , we realized a foreign currency translation loss of approximately $ 3.8 million in the year ended december 31 , 2013. in january 2014 , the venezuelan government significantly expanded the use of the supplementary foreign currency administration system ( sicad ) i exchange market and created a third exchange market called sicad ii . these markets have exchange rates significantly less favorable than the cencoex rate . the venezuelan government also indicated that the cencoex rate will be reserved for purchases of “ essential goods and services . ” in february 2015 , the venezuelan government announced a new exchange market called the marginal currency system ( simadi ) , which will replace the sicad ii exchange and allow for trading based on supply and demand . an exchange rate for the simadi market has not been published . the financial position and results of our venezuelan subsidiary as of december 31 , 2014 , are reflected in usd utilizing the cencoex rate and not the december 31 , 2014 sicad i ( 12.0 bolivars to $ 1.00 ) , sicad ii ( 49.98 bolivars to $ 1.00 ) or simadi rates due to our belief that our imports will continue to qualify for the cencoex rate and our intent to continue to pursue this rate for future exchanges . however , we will continue to monitor the evolving venezuela exchange market , including the establishment of the new simadi exchange market . as of december 31 , 2014 , we had net monetary assets of approximately 273 million bolivars . for 2014 , annual net revenues of our venezuela subsidiary were approximately 300 million bolivars . further devaluation of the bolivar , or our inability to convert our net monetary assets denominated in bolivars into us dollars at certain of the exchange rates discussed above , could negatively impact our results of operations , financial condition , or cash flows . 23 irs exam results in 2007 , we received a notice from the irs containing proposed adjustments to our tax filings in connection with an audit of the 2001 and 2002 tax years . the irs did not contest the validity of our reincorporation in bermuda . story_separator_special_tag segment operating margin decreased to 14.7 % for the year end december 31 , 2014 compared to compared to 15.3 % for the same period of 2013 . the decrease was due to increased investment spending ( 1.2 % ) , partially offset by lower restructuring spending ( 0.4 % ) and favorable volume/product mix ( 0.2 % ) . 2013 vs 2012 net revenues for the year ended december 31 , 2013 decreased by 0.3 % , or $ 9.3 million , compared with the same period of 2012 , which primarily resulted from the following : pricing 0.6 % currency exchange rates 0.3 % volume/product mix ( 1.2 ) % total ( 0.3 ) % air compressors and industrial net revenues decreased due to declines in equipment sales , partially offset by growth in parts , service and solutions . club car revenues increased due to growth in both the golf car and utility vehicle markets . segment operating margin remained mostly flat for the year ended december 31 , 2013 and 2012 . productivity benefits in excess of other inflation ( 1.0 % ) were offset by increased investment and restructuring spending ( 0.7 % ) and unfavorable volume/product mix ( 0.5 % ) . discontinued operations the components of discontinued operations for the years ended december 31 are as follows : replace_table_token_10_th discontinued operations by business for the years ended december 31 are as follows : replace_table_token_11_th 29 allegion spin-off on december 1 , 2013 , ( the distribution date ) we completed the spin-off of our commercial and residential security businesses , now under the name of allegion , plc ( allegion ) , to our shareholders ( the spin-off ) . on the distribution date , each of our shareholders of record as of the close of business on november 22 , 2013 ( the record date ) received one ordinary share of allegion for every three ingersoll-rand plc ordinary shares held as of the record date . allegion is now an independently traded public company . net revenues and after-tax earnings of allegion for the year ended december 31 were as follows : replace_table_token_12_th after-tax earnings from allegion for the year ended december 31 , 2014 primarily represent adjustments for certain tax matters . after-tax earnings from allegion for the years ended december 31 , 2013 and 2012 include spin costs of $ 128.0 million and $ 5.7 million , respectively . also , the 2013 results include non-cash goodwill charges and tax of $ 111.4 million and $ 148.2 million , respectively . other discontinued operations the components of other discontinued operations for the years ended december 31 were as follows : replace_table_token_13_th other discontinued operations , net of tax for the years ended december 31 , 2014 , 2013 and 2012 are mainly related to postretirement benefits , product liability , worker 's compensation , and legal costs ( mostly asbestos-related ) from previously sold businesses and tax effects of post-closing purchase price adjustments . retained costs recognized in 2012 are primarily related to the settlement of post-closing matters with doosan infracore related to its 2007 acquisition of our bobcat utility equipment and attachments business in 2007. liquidity and capital resources we earn a significant amount of our operating income in jurisdictions where it is deemed to be permanently reinvested . our most prominent jurisdiction of operation is the u.s. we currently do not intend nor foresee a need to repatriate funds to the u.s. , and no provision for u.s. income taxes has been made with respect to such earnings . we expect existing cash and cash equivalents available to the u.s. , the cash generated by our u.s. operations , our committed credit lines as well as our expected ability to access the capital and debt markets will be sufficient to fund our u.s. operating and capital needs for at least the next twelve months and thereafter for the foreseeable future . in addition , we expect existing non-u.s. cash and cash equivalents and the cash generated by our non-u.s. operations will be sufficient to fund our non-u.s. operating and capital needs for at least the next twelve months and thereafter for the foreseeable future . should we require more capital in the u.s. than is generated by our u.s. operations , and we determine that repatriation of non-u.s. cash is necessary , such amounts would be subject to u.s. federal income taxes . in february 2015 , we announced an increase in our quarterly share dividend from $ 0.25 to $ 0.29 per share beginning with our march 2015 payment . in february 2014 , our board of directors authorized the repurchase of up to $ 1.5 billion of our ordinary shares under a new share repurchase program upon completion of the current share repurchase program . the new share repurchase program began in april of 2014. during the year ended december 31 , 2014 , we repurchased 23.0 million shares for $ 1.4 billion , of which 9.8 million shares for $ 583.4 million were under the 2014 program . we expect our available cash flow , committed credit lines and access to the capital markets will be sufficient to fund the increased dividend and share repurchases . on august 18 , 2014 , we announced an agreement to acquire the assets of cameron international corporation 's centrifugal compression division for $ 850 million . the acquisition was completed on january 1 , 2015 , funded through a combination of cash from operations and debt . 30 liquidity the following table contains several key measures to gauge our financial condition and liquidity at the periods ended december 31 : replace_table_token_14_th short-term borrowings and current maturities of long-term debt at december 31 consisted of the following : replace_table_token_15_th commercial paper program the maximum aggregate amount of unsecured commercial paper notes available to be issued , on a private placement basis , under the commercial paper program is $
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | cash flows the following table reflects the major categories of cash flows for the years ended december 31 , respectively . for additional details , please see the consolidated statements of cash flows in the consolidated financial statements . replace_table_token_16_th operating activities net cash provided by operating activities from continuing operations was $ 991.7 million for the year ended december 31 , 2014 compared with $ 798.8 million in 2013 . operating cash flows for 2014 reflect improved earnings from continuing operations partially offset by rising working capital in 2014 . 32 net cash provided by operating activities from continuing operations was $ 798.8 million for the year ended december 31 , 2013 compared with $ 882.5 million in 2012 . operating cash flows for 2013 reflect consistent earnings from continuing operations after taking into account spin-related tax charges with no cash impact in 2013 and favorable changes in working capital . investing activities net cash used in investing activities from continuing operations was $ 197.0 million for the year ended december 31 , 2014 compared with $ 213.2 million in 2013 . the change in investing activities is primarily attributable to $ 30.3 million cash dividend received from equity investments during the year ended december 31 , 2014. net cash used in investing activities from continuing operations was $ 213.2 million for the year ended december 31 , 2013 compared with $ 128.2 million in 2012 . the change in investing activities is primarily attributable to increased capital expenditures and decreased net proceeds from business dispositions and equity investments in 2013 compared to 2012. financing activities net cash used in financing activities from continuing operations during the year ended december 31 , 2014 was $ 859.5 million , compared with net cash provided by financing activities from continuing operations of $ 354.1 million in 2013 .
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we conducted an end of phase 2 meeting with the fda in late february 2017 and we expect to begin a phase 3 clinical program in systemic sclerosis by the end of the third quarter of 2017. based on the positive phase 2 clinical results in systemic sclerosis , we also filed an application with the fda in march 2017 for breakthrough therapy designation . in december 2016 , we completed a second phase 2 study in cystic fibrosis study and expect to report top-line data from this study by the end of march 2017. a third phase 2 study in dermatomyositis is expected to be completed in the third quarter of 2017 and a fourth phase 2 in systemic lupus erythematosus is planned to start during the second quarter of 2017. the united states food and drug administration ( “ fda ” ) has granted jbt-101 orphan designation as well as fast track status for both cystic fibrosis and systemic sclerosis . financial operations overview we are a clinical stage pharmaceutical company and have not generated any revenues from the sale of products . we have never been profitable and , from inception through december 2016 , our losses from operations have been approximately $ 33.3 million . our net losses for the years ended december 31 , 2016 and 2015 were approximately $ 19,999,000 and $ 8,851,000 , respectively . we expect to continue to incur significant expenses and increasing operating losses for the foreseeable future . we expect our expenses to increase significantly in connection with our ongoing activities to develop , seek regulatory approval and commercialization of jbt-101 . furthermore , we expect to incur additional costs associated with operating as a public company . accordingly , we will need additional financing to support our continuing operations . we will seek to fund our operations through public or private equity or debt financings or other sources , which may include government grants and collaborations with third parties . adequate additional financing may not be available to us on acceptable terms , or at all . our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy . we will need to generate significant revenues to achieve profitability , and we may never do so . we expect to continue to incur significant expenses and increasing operating losses for at least the next several years . we expect our expenses will increase substantially in 2016 and in the future in connection with our ongoing activities , as we : ● conduct clinical trials for jbt-101 in scleroderma , cystic fibrosis , systemic lupus erythematosus and other indications ; ● continue our research and development efforts ; ● manufacture clinical study materials and develop commercial scale manufacturing capabilities ; ● seek regulatory approval for our product candidates ; ● add personnel to support development of our product candidates ; and ● operate as a public company . 47 critical accounting policies and estimates our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the united states of america . the preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . on an ongoing basis , we evaluate our estimates and judgments for all assets and liabilities , including those related to stock-based compensation expense and the fair value determined for stock purchase warrants classified as derivative liabilities . we base our estimates and judgments on historical experience , current economic and industry conditions and on various other factors that are believed to be reasonable under the circumstances . this forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions . we believe that full consideration has been given to all relevant circumstances that we may be subject to , and the consolidated financial statements accurately reflect our best estimate of the results of operations , financial position and cash flows for the periods presented . revenue to date , we have not generated any revenues from the sales of products . we do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for the marketing of jbt-101 , which we expect will take a number of years and is subject to significant uncertainty . we have recorded $ 1,911,424 and $ 648,382 of collaboration revenue in the year ended december 31 , 2016 and december 31 , 2015 , respectively , related to an award agreement we entered into in fiscal 2015 with the cfft , pursuant to which we received a development award ( the “ award ” ) for up to $ 5 million in funding . the funding from the award is supporting the phase 2 clinical trial of jbt-101 in adults with cystic fibrosis . we have billed and received a total of $ 4.5 million in payments since the inception of the award as outlined below . the payments received under the award have been recorded as deferred revenue and are being amortized on a straight-line basis over the expected duration of the performance period under the award , which is expected to conclude in the second quarter of 2017. upon the execution of the award agreement , we received a payment of $ 1,250,000 in may 2015. in november 2015 , we received a second payment of $ 1,250,000 uponthe achievement of a milestone for dosing the first patient . story_separator_special_tag we use historical data , as well as subsequent events occurring prior to the issuance of the consolidated financial statements , to estimate option exercise and employee forfeitures within the valuation model . the expected term of options granted to employees under our stock plans is based on the average of the contractual term ( generally 10 years ) and the vesting period ( generally 48 months ) . the expected term of options granted under the 2014 plan , all of which qualify as “ plain vanilla ” per sec staff accounting bulletin 107 , is based on the average of the 6.25 years . for non-employee options , the expected term is the contractual term and stock options granted to non-employee consultants are revalued at the end of each reporting period until vested and changes in their fair value are recorded as adjustments to expense over the related vesting period . the risk-free rate is based on the yield of a u.s. treasury security with a term consistent with the option . the risk-free rate is based on the yield of a u.s. treasury security with a term consistent with the expected term of the option . we estimate the forfeiture rate at the time of grant and revise it , if necessary , in subsequent periods if actual forfeitures differ from those estimates . forfeitures were estimated based on management 's expectation through industry knowledge and historical data . we have never paid dividends on our common stock and do not anticipate paying dividends on our common stock in the foreseeable future . accordingly , we have assumed no dividend yield for purposes of estimating the fair value of our share-based compensation . 49 the following assumptions were used to estimate the fair value of stock options granted using the black-scholes option pricing model for the years ended december 31 , 2016 and 2015 is as follows : replace_table_token_5_th emerging growth company status under section 107 ( b ) of the jumpstart our business startups act of 2012 , emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies . we have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and , therefore , we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies . results of operations comparison of year ended 2016 to 2015 collaboration revenue . we have recorded $ 1,911,424 and $ 648,382 of collaboration revenue in the year ended december 31 , 2016 and december 31 , 2015 , respectively , related to an award agreement we entered into in fiscal 2015 with the cfft , pursuant to which we received a development award ( the “ award ” ) for up to $ 5 million in funding . the funding from the award is supporting the phase 2 clinical trial of jbt-101 in adults with cystic fibrosis . we have billed and received a total of $ 4.5 million in payments since the inception of the award as outlined below . the payments received under the award have been recorded as deferred revenue and are being amortized on a straight-line basis over the expected duration of the performance period under the award , which is expected to conclude in the second quarter of 2017. upon the execution of the award agreement , we received a payment of $ 1,250,000 in may 2015. in november 2015 , we received a second payment of $ 1,250,000 upon the achievement of a milestone for dosing the first patient . in august 2016 , we received a third payment from the cfft in the amount of $ 1,000,000 for achieving a milestone in july 2016 related to dosing the median clinical trial patient . in january 2017 , we received a fourth payment from the cfft in the amount of $ 1,000,000 for achieving a milestone in december 2016 related to completing the final visit for the final patient . we expect that the last milestone payment of $ 500,000 under the award will be recorded in the second quarter of 2017 upon the achievement of the final milestone related to the phase 2 cf clinical trial , as set forth in the award agreement . research and development . research and development expenses for the year ended december 31 , 2016 totaled approximately $ 15,437,000 , an increase of $ 9,548,000 over the $ 5,889,000 recorded for the year ended december 31 , 2015. the increase in fiscal 2016 as compared to fiscal 2015 was primarily attributable to increases of $ 7,132,000 in clinical trial costs , $ 1,447,000 in compensation costs , and $ 969,000 in stock-based compensation expense . general and administrative . general and administrative expense for the year ended december 31 , 2016 totaled approximately $ 6,460,000 , an increase of $ 2,847,000 over the $ 3,613,000 recorded for year ended december 31 , 2015. the increase in fiscal 2016 as compared to fiscal 2015 was primarily attributable to increases of approximately $ 1,251,000 in stock-based compensation expense , $ 997,000 in compensation costs , $ 375,000 in investor relations costs , and $ 213,000 in legal costs . other income ( loss ) , net . other loss , net for fiscal 2016 was approximately $ 14,000 as compared to other income , net of approximately $ 3,000 recorded for fiscal 2015 and was primarily attributable to an increase in foreign currency exchange transaction losses recorded during fiscal 2016. story_separator_special_tag contractual obligations and commitments the following table presents information about our known contractual obligations as of december 31 , 2016. it does not reflect contractual obligations that may have arisen or may arise after that date . except for historical facts , the information in this section is forward-looking information . replace_table_token_6_th ( 1 ) in september 2016 , our
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources since inception , we have experienced negative cash flows from operations . we have financed our operations primarily through sales of equity-related securities . in addition , the majority of the costs of the dermatomyositis and systemic lupus erythematosus clinical trials are being funded by nih grants and our cystic fibrosis clinical trial has been partially funded by a $ 5 million award from the cfft . at december 31 , 2016 , our accumulated deficit since inception was approximately $ 33,276,000 . 50 at december 31 , 2016 , we had total current assets of approximately $ 17,403,000 and current liabilities of approximately $ 8,899,000 resulting in working capital of $ 8,504,000. net cash used in operating activities for the year ended december 31 , 2016 was approximately $ 13,571,000 , which includes a net loss of approximately $ 19,999,000 , non-cash expenses of approximately $ 3,341,000 principally related to the increase in stock-based compensation expense , and approximately $ 3,086,000 of cash provided from a change in net working capital items principally related to the increase in accounts payable and accrued expenses . cash used in investing activities for the year ended december 31 , 2016 totaled approximately $ 353,000 for the purchase of property and equipment .
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we are also conducting a companion clinical trial with evk-001 in male subjects with symptoms associated with acute and recurrent diabetic gastroparesis to assess the safety and efficacy of evk-001 in men . the male companion trial was initiated in may 2014 and is designed similarly to the phase 3 trial in women . this trial was requested by the fda , but is not required for submission of the evk-001 nda for women , however , we expect to include safety data from this trial in the nda submission . we have no products approved for sale , and we have not generated any revenue from product sales or other arrangements . we have primarily funded our operations through the sale of our convertible preferred stock , borrowings under our loan and security agreements and the sale of shares of our common stock on the nasdaq capital market . we have incurred losses in each year since our inception . our net losses were $ 12.1 million and $ 13.2 million for the years ended december 31 , 2015 and 2014 , respectively . as of december 31 , 2015 and 2014 , we had an accumulated deficit of $ 48.1 million and $ 35.9 million , respectively . substantially all of our operating losses resulted from expenses incurred in connection with advancing evk-001 through development activities and general and administrative costs associated with our operations . we expect to continue to incur significant expenses as we complete our phase 3 clinical trial , continue our nda preparation and move forward with pre-commercial launch activities for at least the next two years . we may never become profitable , or if we do , we may not be able to sustain profitability on a recurring basis . 43 as of december 31 , 2015 we had cash and cash equivalents of $ 8.7 million . we expect to be able to fund our operations throug h october 2016 , but we will need to raise additional capital to fund any additional development requirements requested by the fda , as well as for nda preparation and pre-commercial activities , including marketing and manufacturing of evk-001 . as more full y described in note 6 to the financial statements , in november 2014 we entered into a sales a greement , or the sales agreement , with mlv & co. llc , which was subsequently acquired by fbr & co. , or fbr , pursuant to which we may sell from time to time , at our option , up to an aggregate of $ 6.6 million worth of shares of common stock through fbr , as sales agent . as of december 31 , 2015 , we had sold 1,048,507 shares of our common stock pursuant to the sales agreement , and received proceeds of approximately $ 4.9 million , net of commissions and fees . as of february 29 , 2016 , due to sec regulations , we are unable to sell any further shares of our common stock under the sales agreement due to current capacity restrictions . though we may have such capability in the future , we may not be able to raise additional capital on terms acceptable to us , or at all . any failure to raise capital as and when needed could have a material adverse effect on our results of operations , financial condition , cash flows and our ability to execute on our business plan . in its report on our financial statements for the year ended december 31 , 201 5 , our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt regarding our abilit y to continue as a going concern . technology acquisition agreement in june 2007 , we acquired all worldwide rights , data , patents and other related assets associated with evk-001 from questcor pursuant to an asset purchase agreement . we paid questcor $ 650,000 in the form of an upfront payment and $ 500,000 in may 2014 as a milestone payment based upon the initiation of the first patient dosing in our phase 3 clinical trial for evk-001 . in august 2014 , mallinckrodt acquired questcor . as a result of that acquisition , questcor transferred its rights included in the asset purchase agreement with us to mallinckrodt . in addition to the payments we made to questcor , we may also be required to make additional milestone payments to mallinckrodt totaling up to $ 51.5 million . these milestones include up to $ 4.5 million in payments if evk-001 achieves the following development targets : ● $ 1.5 million upon the fda 's acceptance for review of an nda for evk-001 ; and ● $ 3 million upon the fda 's approval of evk-001 . the remaining $ 47 million in milestone payments depend on evk-001 's commercial success and will only apply if evk-001 receives regulatory approval . in addition , we will be required to pay to mallinckrodt a low single digit royalty on net sales of evk-001 . our obligation to pay such royalties will terminate upon the expiration of the last patent right covering evk-001 , which is expected to occur in 2030. financial operations overview research and development expenses we expense all research and development expenses as they are incurred . research and development expenses primarily include : ● clinical trial and regulatory-related costs ; ● expenses incurred under agreements with cros , investigative sites and consultants that conduct our clinical trials ; ● manufacturing and stability testing costs and related supplies and materials ; and ● employee-related expenses , including salaries , benefits , travel and stock-based compensation expense . all of our research and development expenses to date have been incurred in connection with evk-001 . story_separator_special_tag however , we currently estimate the costs of our phase 3 clinical trial in women and our companion clinical trial in men of evk-001 will be approximately $ 16.5 million , of which , through december 31 , 2015 , $ 13.7 million have been incurred related to those clinical activities . accordingly , we will continue to require substantial additional capital beyond our current cash and cash equivalents to continue our clinical development and potential commercialization activities . the amount and timing of our future funding requirements will depend on many factors , including the pace and results of our clinical development efforts . we anticipate that we will seek to fund our operations through public or private equity or debt financings or other sources , such as potential collaboration arrangements . our failure to raise capital as and when needed would have a negative impact on our financial condition , results of operations , cash flows and our ability to pursue our business strategies . on november 13 , 2014 , we entered into the sales agreement with mlv , pursuant to which we may sell from time to time , at our option , up to an aggregate of $ 6.6 million worth of shares of common stock through mlv , as sales agent . during september 2015 , fbr acquired mlv and assumed its rights and obligations under the sales agreement . the sales of shares of our common stock made through this equity program are made in “ at-the-market ” offerings as defined in rule 415 of the securities act . through december 31 , 2015 , we have sold 1,048,507 shares of common stock at a weighted average price per share of $ 4.78 pursuant to the sales agreement and received proceeds of approximately $ 4.9 million , net of commissions and fees . we incurred approximately $ 138,000 of legal , accounting and filing fees related to our form s-3 filed in november 2014. such costs were capitalized and included in other current assets at december 31 , 2014 , and have been reclassified to additional paid-in capital as a further offset to the net proceeds . we intend to use the net proceeds to continue to fund our ongoing phase 3 clinical trial and for general corporate purposes . future sales will depend on a variety of factors including , but not limited to , market conditions , the trading price of our common stock and our capital needs . although sales of our common stock have taken place pursuant to the sales agreement , there can be no assurance that fbr will be successful in consummating future sales based on prevailing market conditions or in the quantities or at the prices that we deem appropriate . under current sec regulations , at any time during which the aggregate market value of our common stock held by non-affiliates , or public float , is less than $ 75 million , the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements , including sales under the sales agreement , is limited to an aggregate of one-third of our public float . as of february 29 , 2016 , our public float was 4.1 million shares , the value of which was $ 14.6 million based upon the closing price of our common stock of $ 3.57 on february 22 , 2016. the value of one-third of our public float calculated on the same basis was $ 4.8 million . as of february 29 , 2016 , we are unable to sell any further shares of common stock pursuant to the sales agreement due to current capacity restrictions . in addition , we will not be able to make future sales of our common stock pursuant to the sales agreement unless certain conditions are met , which include the accuracy of representations and warranties made to fbr under the sales agreement . furthermore , fbr is permitted to terminate the sales agreement in its sole discretion upon ten days ' notice , or at any time in certain circumstances , including the occurrence of an event that would be reasonably likely to have a material adverse effect on our assets , business , operations , earnings , properties , condition ( financial or otherwise ) , prospects , stockholders ' equity or results of operations . we have no obligation to sell the remaining shares available for sale pursuant to the sales agreement . our recurring losses from operations raise substantial doubt about our ability to continue as a going concern , and as a result , our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of and for the year ended december 31 , 2015 with respect to this uncertainty . this going concern opinion could materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise . future reports on our financial statements may also include an explanatory paragraph with respect to our ability to continue as a going concern . we have incurred significant losses since our inception and have never been profitable , and it is possible we will never achieve profitability . we have devoted our 49 resources t o developing our product candidate , but it can not be marketed until regulatory approvals have been obtained . based upon our currently expected level of operating expenditures , we expect to be able to fund our operations through october 201 6 . this period co uld be shortened if there are any significant increases in planned spending on our evk-001 development program or more rapid progress of our ongoing phase 3 clinical trial than anticipated . there is no assurance that other financing will be available when needed to allow us to continue as a going concern . the perception that we may
| Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text. | liquidity and capital resources since our inception in 2007 , we have funded our operations primarily from the sale of equity securities and borrowings under loan and security agreements . prior to our ipo , we received $ 17.7 million in net proceeds from the sale of our series a convertible preferred stock and advances of $ 5.5 million under the loan and security agreements . during 2013 , we completed our ipo and raised approximately $ 25.1 million , net of offering costs and commissions . during 2015 , we received net proceeds of approximately $ 5.0 million from the sale of common stock through our sales agreement with fbr and , to a lesser extent , our employee stock purchase plan , or espp . we have incurred losses since inception and have negative cash flows from operating activities . as of december 31 , 2015 , we had approximately $ 8.7 million in cash and cash equivalents and working capital of approximately $ 7.7 million . in june 2012 , we entered into a $ 3 million loan and security agreement with svb , collateralized by our personal property and containing only non-financial covenants . by january 2013 , we had been advanced the entire $ 3 million to fund working capital . interest on advances under the agreement was at a fixed interest rate equal to 4.50 % . advances under the loan and security agreement had an interest-only period through december 31 , 2013 , and had a 24-month payback period that commenced in january 2014. in connection with the loan and security agreement , we issued a warrant to svb , which is immediately exercisable for an aggregate of 12,000 shares of our common stock , at an exercise price of $ 7.50 per share . through may 1 , 2014 , we repaid approximately $ 603,000 of principal on the svb loan . on may 23 , 2014 , we repaid the outstanding principal and accrued interest of approximately $ 2.4 million to svb . with such payoff , the loan and security agreement with svb and the documents entered into in connection therewith were deemed to be terminated .
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